St. Clair Township vows to fight OPG’s bid to cut taxes for LGS

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Lambton Generating Station in Courtright.

St. Clair Township is tired of Ontario Power Generation  trying to wiggle out of paying taxes.

Mayor Steve Arnold and his council have been dealing with the “unintended consequences” of the Liberal’s promise to stop using coal to produce power since the first of the four units were shut down in Oct. 2010.

There were, of course, local job losses – at one point over 700 people worked there. But the closure also affects every taxpayer as Ontario Power Generation, looking to save money, applied to have its taxes reduced.

Arnold says since the operations at LGS began to wind down, the municipality has lost $2.8 million in tax revenue. “That’s 30 per cent of our total budget,” he says. “That’s what our ratepayers had to absorb.”

Originally, the value of the 1000 acre site was set by the Municipal Property Assessment Corporation at $56 million. Arnold says considering there are four units and a thousand acres of land, OPG was already getting a good deal.

But as the output of the plant decreased, OPG said the plant wasn’t worth as much. In 2008, Hydro One wanted the value of the plant to drop to just $24 million and they wanted five years of savings to boot – $14 million in total. “We ended up going through mediation,” says Arnold. His council decided “this is enough. The meter is running and the only people getting money out of this is the lawyers.”

St. Clair ended up coming up with $3.3 million to repay OPG.

After the settlement, the municipality went to one Energy Minister after another with ideas to “mitigate the damage” done by the closure of the plant. Each idea has been rejected.

Most recently, Arnold has been floating the idea of Hydro One turning over the power grid in St. Clair. The township would then sell it to Bluewater Power and make money on dividends.

He’s been told by bureaucrats that because Hydro One is now up for sale, they can’t talk about deals like that.

Arnold has even appealed directly to Premier Kathleen Wynne who listened politely but did nothing.

“They don’t have the time of day for us.”

They do, however, now. OPG  has launched another appeal to its assessment at the site. It now says LGS is worth just $12 million.

“It is very, very frustrating,” says Arnold. “Losing the jobs in the community is one thing but then have someone saying the site is not worth anything?”
Arnold points out LGS is keeping the plant on standby saying it may become a power plant which uses biomass.

“They now say it will be 2024 before they know what they’re going to do. In the meantime, they’re trying to reduce their taxes to nothing… any other industry wouldn’t be able to entertain a downgrade in taxes because they’re still ready to run.”

So Arnold says his council is preparing to fight. “Deep down, we thought we would do better working with the province than making a big splash in the media… we always wanted to keep working with them because we thought the province wanted to work with us,” he says. The tax appeal, he says, is proof they don’t.

“We’re not giving in, anymore. We’ve come to the table more than enough. If you don’t like it, sell your facility; sell your assets. This is by far the lowest taxed jurisdiction they are in… and now they want to keep beating us up.”

“We’re tired of being beat up by people who are already getting a good deal on their taxes.”