B.C. premier breaks eight-year tax log jam for logging contractors

VICTORIA – Premier Christy Clark announced a break in a tax log jam Friday that has concerned British Columbia forest contractors since 2003 when the Liberals cut forest tenures in an industry-wide restructuring plan.

Clark told delegates at the annual Truck Loggers Association convention on Friday that ongoing B.C. government lobby efforts on behalf of forest contractors convinced the federal government to forgive the tax hit many received during the restructuring.

She said up to 190 forest contractors will get back $9 million in federal taxes.

The B.C. Forestry Revitalization Trust was established in 2003 to provide compensation to B.C. forest companies as a result of government restructuring.

B.C. did not tax the compensation payments, but Ottawa did, and the industry had been fighting the taxes ever since.

The B.C. forests ministry reports the revitalization trust paid $71 million to about 300 logging contractors under its original mandate.

“The tax bill will be relieved,” said Clark. “We moved legislation to forgive the taxes, the federal government decided they were going to claw that back, and the federal government’s no longer clawing it back.”

Truck Loggers Association president Dwight Yochim said contractors have been waiting and lobbying for a decade to resolve the tax matter.

“Some of them actually went out of business, some of them sold some of their business and restructured,” he said. “They’ve been waiting for this compensation to come back. They are now able to reinvest in the industry again, get new equipment and get back up right at the time the industry is really starting to pick up.”

Clark also told the truck loggers she is putting $5 million into a forest contractors protection fund that offers compensation to companies who end up dealing with other companies that go broke.

The Forestry Service Providers Compensation Fund was established last year, under the Forestry Service Providers Protection Act.

Clark said she expected the fund to reach $15 million, but hoped its use will not be required as the industry continues to rebound.