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Domtar, Espanola reach tax agreement

The Town of Espanola and Domtar Inc. have reached an agreement that resolves outstanding tax matters.
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Domtar and the Town of Espanola have reached a tax agreement regarding the company’s Espanola pulp and paper mill. (FILE PHOTO)

The Town of Espanola and Domtar Inc. have reached an agreement that resolves outstanding tax matters.

No details of the agreement were provided, but in a press release, the two parties indicated the agreement settles outstanding matters with respect to the mill's assessed value from 2009-2016 and industrial tax rates from 2013-2016.

Following a property reassessment in February 2013, the Municipal Property Assessment Corp. (MPAC) found that the town had to repay Domtar more than $4 million.

MPAC’s returned assessment of Domtar’s Espanola paper mill property was $9,937,000 for the years 2009 to 2012. The original assessed value for these years ranged between $19,000,000 and $26,522,040. The $19,000,000 was the assessed value arising from the previous decision for the years 2006, 2007 and 2008.

The result was a refund of property taxes of approximately $4.9 million, of which $940,000 was the education portion, which was to be recovered from the Ministry of Education reconciliation. At the time, the town said it was prepared for a reduction in assessment to the previously determined level of $19,000,000; however, the assessed value was approximately 50 per cent less than what was anticipated.

"We are relieved to arrive at a resolution with Domtar Inc.," Espanola Mayor Mike Lehoux said in the release. "This agreement will help to stabilize taxation and contribute to an economic, social and cultural climate conducive to growth."

Scott Mosher, general manager of the Espanola mill, echoed his words.

"We are pleased to have reached this important agreement with the town," Mosher said. "We believe it is in our mutual interest to ensure a sustainable mill operation in Espanola and contribute to a sustainable community, and we believe this agreement accomplishes these objectives."

Espanola is located roughly 45 minutes west of Sudbury, and is a service and retail centre for the LaCloche-Manitoulin area. The Domtar mill is one of the town’s largest employers.