District of North Vancouver fights Fibreco lawsuit

The District of North Vancouver is pushing back against a lawsuit from Fibreco Export Ltd., a waterfront export terminal accusing the municipality of attempting to collect more taxes than the company owes.

The dispute stems from decisions made by the previous B.C. Liberal government under the Ports Property Tax Act, which allowed cabinet to cap property tax rates on waterfront industrial properties.

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Fibreco’s woodchip export terminal on McKeen Avenue had been subject to the capped rate since 2004. The government removed the legislated lower tax rates for Fibreco between 2010 and 2013; however, no one informed the district so Fibreco’s tax bills were lower than they should have been for those years.

When district staff discovered the problem, the shortfall in the taxes Fibreco had paid and what they should have been billed was $994,000, according to the district. Staff from the Ministry of Finance told the district Fibreco’s removal from the capped rates in 2010 to 2013 had been due to a clerical error and reinstated the preferred rate in 2015.

The district threatened to seize the property for delinquent taxes and auction it off in 2017, prompting the company to pay up $256,701, the minimum amount needed to halt the tax sale.

Fibreco sued the district in March, saying the payment was made under protest and that the district was “unjustly enriched” at Fibreco’s expense. Fibreco is asking the courts to force the return of the $256,701, plus interest, declare that the company owes no back taxes, and grant a permanent injunction preventing the district from attempting another tax sale.

District lawyers have filed a statement of defence, arguing Fibreco still owes $1,162,279, which includes penalties and interest.

“In short, the plaintiffs say they are entitled to benefit from the mistake and have no obligation to pay the properly calculated taxes for 2010 to 2013,” the response states.

The district argues the Community Charter requires them to collect all taxes owing and does not give them the discretion to change the way it calculates property taxes, waive debts, or impose taxes of a greater or lesser amount. And, the district argues, there is nothing in the charter that forbids them from issuing amended tax notices, as they did in Fibreco’s case.

“There is no basis for the plaintiff’s claim of unjust enrichment, because all of the tax payments made by the plaintiffs, and more, are due and owing.”

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