Remote tourism operators hampered by 'excessive' tax.

Remote tourism operators hampered by `excessive' tax

Tourist operators north of Lake Superior believe that excessive education taxes are adversely affecting the development and growth of their businesses. And despite their efforts, nothing is being done about it.

"Something has to be done about the political run-around we are getting," said Norm Quan, owner of the White Lake Lodge.

Quan said that he and other operators in the area have been trying for the considers a grave have what he considers a grave injustice corrected.

Quan explained that excessive school tax levies imposed by the Lake Superior Board of Education on seasonal tourism and service operations in the unorganized townships have become an unbearable burden.

Quan claims that he and other tourist operators within the board's jurisdiction are required to pay more education tax than similar businesses in organized townships.

"This is exactly what is happening," said Charles Kneipp, owner of the Coach House Motel near Terrace Bay.

Officials of the Lake Superior Board of Education were unavailable for comment at press time.

Lake Nipigon MPP Gilles Pouliot said Quan "is absolutely right. His taxes are too high, but his case is somewhat unusual."

Pouliot explained that everyone is the riding pays more tax because the townships are unable to tax the underground wealth of mining operations in the Hemlo region.

In a letter to Education Minister Sean Conway, Pouliot reported that "assessment and taxing of these (mining) operations is based on above-ground assets and does not reflect the millions of dollars of underground capital costs in place at these mines."

According to Quan, he pays between $150 and $155 in tax for every $1,000 of assessed property. Similar businesses in towns such as Marathon and Manitouwadge pay about $92 per $1,000.

Quan pays approximately $4,000, based on the $250,000 assessed value of his business.

By comparison, Quan said he knows of a business "just 20 miles down the highway," which is located within the jurisdiction of the Michipicoten Board of Education, which is required to pay "less than $500 per year in taxes."

Located approximately 50 miles from Manitouwadge and Marathon, Quan said he receives no real benefit from the growth of these towns. "However, I am expected to dole out, at an increased mill rate, more than what operations in the towns are paying." Quan made the statement in a letter to Northern Development Minister Rene Fontaine.

The operators claim that the problem began with the development of the Hemlo gold field.

Quan explained that taxes increased when the unorganized school board to broaden its tax base and tax the mining operations at Hemlo.

"It started when Hemlo was born," he insisted.

Quan said that prior to the Hemlo development, "we paid $190 in property tax, and no education taxes."

Kneipp agrees that the situation was created following the advent of the mining development.

He said the unorganized township in which his motel is located was attached to Terrace Bay "solely for the purpose of raising our taxes."

Kneip explained that at the onset of the development of the town of Marathon, a direct result of the gold discoveries at Hemlo, "the clerks of the four towns (Marathon, Terrace Bay, Schreiber and Manitouwadge) attached us in the unorganized areas to the closest town."

He said when this occurred, his taxes jumped 124 per cent, compared to 29 per cent in the town of Terrace Bay.

"So much is being paid by so few," commented Quan.

In his Feb. 10 letter to Fontaine, Quan said, "We realize that it costs money for education and that we, as business people, should contribute toward the future of this country. However, we fell that what has happened with the Lake Superior Board of Education constitutes gouging. I am not saying that taxes should be forgiven, however there has to be an equitable solution to the problem."

One equitable alternative, said Pouliot in his letter to Conway, is a formula be created for tax assessment of seasonal tourist operations which more accurately reflects the nature of the operations.

A mill rate equal to half the annual amount "would be more representative of such operations and would be an incentive for them to stay in business and improve amenities," Pouliot suggested.

However, Kneipp wants more. In a letter addressed to Premier David Peterson, Kneipp calls for taxes to be returned to their preannexation level and for a refund of the difference paid since the unorganized townships were annexed.

Quan said the problem has been on-going for the past five years and, although operators have attempted to handle the situation on their own, without assistance, the barriers of municipal and provincial politics are difficult to overcome.

Quan said he, for instance, appealed his assessment to the assessment review board when he realized the first increase some five years ago.

"There is no question that the assessment is fair ($250,000). It is the mill rate that is the unfair portion," said Quan.

He further admitted that since the first appeal, he has appealed his taxes every year since, but to no avail.

He said that on the last occasion, his assessment was reduced by $15,000, but the "high" mill rate remained. "Nothing has been done with the mill rate," Quan said.

Admitting that the introduction of Bill 100 by Education Minister Sean Conway, helped address the complaint, Kneipp commented it hasn't corrected the matter.

"Bill 100 rightly detached us from the town (Terrace Bay) and stopped the respective town clerks from arbitrating our taxes, but it did not address the enormous tax base achieved. In short, taxation without representation ceased, but more importantly, our inflated tax base remained."

Quan said his present effort has received the support of at least 12 similar operations in the area.

To date, explained Quan, letters outlining the operators' concerns have been forwarded to several government officials, including Premier Peterson, Pouliot, Conway, Fontaine and Tourism Minister Ken Black.

"I have finally received a reply from Rene Fontaine," said Quan. "He said that he has no jurisdiction in the matter."

Quan said the letter stated, "I regret to inform you that this minister has no jurisdiction over school taxes."

Kneipp reported that a letter he received from David Peterson's office in January also constituted a "run-around.

"All Peterson's letter said was that he would consult with his colleagues on the matter. And that was the last I heard," said Kneipp.