Heavy industrial tax rate in Kamloops nearing provincial average: city staff

KAMLOOPS — City of Kamloops staff say property tax rates for the three heavy industrial properties inside city limits should finally approach the provincial average in 2023.

Council and staff have spent years grappling with how to decrease the Class 4 tax rate without shifting too much of the burden onto residential taxpayers.

The three properties currently subject to the Class 4 rate are the Kruger pulp mill on Mission Flats Road, the Tolko mill in Heffley Creek and the former Lafarge cement plant on the city’s eastern boundary. Even though they share the same designation, Kruger’s annual tax bill is far higher than the other two, based on the assessed value of property and equipment.

The former owner of the pulp mill, Domtar, joined Lafarge and Tolko in 2016 to lobby Kamloops council to lower its tax burden. At the time, Kamloops had the highest Class 4 tax rate in the province among comparable cities. The high tax rate was seen as an impediment to recruiting and retaining industries in Kamloops.

Previous councils opted to use tax revenue generated by growth in Class 2 (Utilities) to subsidize Class 4, slowly decreasing the amount of revenue needed from the three heavy industrial properties.

Image Credit: City of Kamloops

At its regular meeting Tuesday (April 11), staff updated council on how that policy is working.

Kamloops’ 2022 Class 4 mill rate of 53.73 is still higher than the provincial average of 42.68. However, the gap has been narrowing since 2018. In 2023, staff estimates it can set the Kamloops Class 4 mill rate at 45.04.

Once the City of Kamloops Class 4 rate meets the provincial average, it’s expected council will rescind its policy of subsidies from Class 2 and have the Class 4 rate continue to match the provincial average from then on.