VANCOUVER, June 9 /CNW/ - TimberWest is challenging the City of Campbell
River's recent tax increase on its Class 7 managed forest lands in the B.C.
Supreme Court. A petition was filed today for a Judicial Review of the
Taxation Bylaw with the goal of having TimberWest's tax rates on managed
forest lands set aside.
"We believe that Campbell River's Tax Bylaw and Financial Plan are
punitive, unreasonable, and discriminatory as they relate to TimberWest's
managed forest lands and that they conflict with the purposes of the Private
Managed Forest Land Act," said Paul McElligott, President and Chief Executive
Officer of TimberWest. "As such, we were left with no alternative to launching
this legal challenge."
Based on the tax rates established by the Tax Bylaw, TimberWest stands to
pay the City $1,253,696.72 in respect of its managed forest lands in 2009 -
more than 10 times what it paid last year and more than 5 times what
TimberWest would be paying under the Bylaw if TimberWest had removed the lands
from the managed forest land class before September 30, 2008 such that they
were reclassified as residential.
Some of the specific areas of concern are that the Tax Bylaw and Financial
- are in direct conflict with the purpose of the provincial
government's Private Managed Forest Land Act, which is designed to
support investment in sustainable forestry activities. This new tax
would restrict forest management activity on managed forest lands in
Campbell River to the point that TimberWest could not even afford to
fund basic silviculture activities, essentially rendering the lands
sterile from a forestry perspective; and
- were enacted for an improper purpose, because they are designed to
change the use of the land from forestry to real estate development.
To make matters worse, TimberWest was also not provided with the new
zoning to go along with the changed land use.
TimberWest tried to work with elected officials and staff members from
the City on alternatives to this new bylaw that could be applied this year.
But when none could be agreed to, TimberWest was left with few options.
"Resorting to the courts is definitely not the approach we wanted to take
here," added McElligott. "But when it became clear that the Bylaw was going
ahead without modification, we felt there was little choice but to proceed
with this petition. The increased level of taxation can only be funded through
additional borrowings, it places us at a competitive disadvantage, and has
significant negative impacts on our business at a time when we are struggling
to manage through an unprecedented downturn in the coastal forest industry."
The company noted that its core business continues to be forestry and
that only a very small portion of its land base in Campbell River and
elsewhere on the Island will be sold as real estate over a very long period of
"We strongly believe there are potential "win-win" opportunities that
will expand Campbell River's municipal tax base, generate new revenue and
create new economic development in the future as small parcels of our land are
rezoned over time," concluded McElligott. "I look forward to the day when we
can return to working with the City to achieve those goals. We see a positive
future for the company in Campbell River and believe we can be part of the
solution and not a problem."
Given that the matter is now "before the courts", TimberWest will limit
its public comments on this situation until it is resolved.
TimberWest Forest Corp. is uniquely positioned as western Canada's
largest private timber and land management company. The Company owns in fee
simple approximately 322,000 hectares or 796,000 acres of private land and is
in the business of selling timber products and real estate.
Stapled Units of TimberWest Forest Corp. are traded on the Toronto Stock
Exchange under the symbol: TWF.UN
Visit us at our web site: www.timberwest.com
For further information:
For further information: Stephen Bruyneel, Director, Communications and
Government Affairs, Couverdon Real Estate, Telephone: (604) 654-4667, Cell:
(604) 671-3481, Facsimile: (604) 654-4662, Email:
firstname.lastname@example.org; Investor Relations Contact: Bev Park,
Executive Vice President and Chief Financial Officer, Telephone: (604)
654-4600, Facsimile: (604) 654-4662, Email: email@example.com