It’s been a deeper valley than anyone could have foreseen, but after four hard years it looks as if Revelstoke’s local mill is just beginning the climb back up the other side – but they still need all the help they can get.
Representatives from Downie Timber asked city council to keep them in mind when setting taxation rates this year. The appeal comes weeks before council sets final tax rates, and is a continuation of a six-year lobby effort by the mill to have their property taxes reduced.
Downie representative Jack Heavenor led a delegation to council’s Mar. 13 city council meeting. His presentation focused on the positives the mill brings to Revelstoke as well as the challenges they’re facing.
Heavenor said Downie was slowly starting to recover after taking serious hits following the economic downturn starting in 2008.
Back in 2008, some of Downie’s core cedar products were commanding $1,200 per thousand board feet. That price dropped to $880 by 2010 and then to $750 by 2011. “It’s hammered us,” Heavenor said. Prices have increased slightly this year, but only to about $775.
He noted that housing starts in the U.S. had plummeted to less than half what they’d been in the years prior to 2008 and would likely take several years to recover significantly.
Heavenor said the company endured some of the highest logging costs in the province due to our mountainous geography. Downie also has to compete on the open market to buy logs -- and they’re facing significant competition from overseas buyers of raw logs who pay much more.
A strong Canadian dollar has hurt the company’s competitiveness, and they also face significant tariffs at the border.
“The challenge to survive in that environment is significant,” Heavenor said. “It’s absolutely critical that we maintain our competitive edge.”
Heavenor stressed the socio-economic impacts of the sawmill. It employs about 300 to 350 people with annual payroll in the range of $20-$22 million. Heavenor said hourly staff hadn’t had a raise in five years.
He said the average income was $62,000 per year with a regional economic contribution of $65 million. “A lot builds around our business – there’s quite a spinoff effect,” Heavenor said.
Heavenor credited the owners of the mill – the Gorman family – for keeping it afloat, noting they’d absorbed “serious losses” in the past few years. He stressed their commitment to the business, including about $52 million in investment in Downie Timber in the past decade. That included $2.2 million in capital investment in the mill last year and $2.5 million planned for this year. “You just don’t see that kind of commitment in this industry,” Heavenor said.
Ron Gorman attended the meeting. “There always should be a mill in this town,” he said. He added that Downie Timber’s value-added philosophy fit well with other mills the family owned.
Heavenor said that Downie Timber wanted to be taxed at the same rate as business and commercial properties. He said Downie’s mill rate was at about $60 in 2005. Through lobby efforts and concessions from council in the past years, they’ve reduced that to about $28. They’d like to see $22. He said it was only fair that they pay the same rates as other businesses.
By 2005, after significant new investment in the mill, Downie’s assessment had jumped to $9,201,300 and taxes had increased to $553,057, or 10.86 per cent of the total tax burden.
According to a 2011 City of Revelstoke finance department report, in 2006, Downie began actively lobbying the city for reductions. By 2008, they were down to $480,876, or 7.52 per cent of the total tax burden. In 2009, it was down to $404,241 and 5.54 per cent. By 2010, $315,424, or 4.14 per cent. In 2011, the mill was again successful in lobbying for concessions; their property tax burden was reduced to $277,921 or 3.52 per cent.
Heavenor noted that many sawmills in the region had not survived. The mill in Slocan City shut in 2011, a Malakwa mill in 2004, the Canfor mill in Radium has been closed for two years. The Interfor mill in Castlegar was closed for two years, amongst other examples.
Mayor David Raven thanked the Gorman family for their “deep, heartfelt commitment” to the sawmill,” adding it was “truly exceptional.”
“We will consider the request again in our budget considerations,” Raven said.