Your residential taxes could go sky high thanks to Essar Steel Algoma

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The City of Sault Ste. Marie is owed $26 million from Essar Algoma Steel in property taxes and wants the cash now.

The City is in court pleading for the tax arrears dating back to 2015, that amount will increase to $29 million by September 2017. The amount owed equates to 25 percent of the city’s overall operating budget and if the arrears are not paid, Sault Ste. Marie ratepayers could end up paying the bill.

The City argues that is should be paid before any other creditor of Essar Steel Algoma.

City Hall has already had to borrow $8 million from reserve accounts to meet it’s cash flow obligations. That money will have to be paid back in 2018 because that money was earmarked for sanitary sewage and capital expenses.

The City tells the court that it has three options if the property tax arrears are not paid and none of the options are good.

One, could see residential property taxes balloon to an additional 12 to 20 percent, that’s on top of the 3 percent levy increase council approved this year.

Two, layoff city employees to the tune of about 80 to 150 employees or cut the city’s capital budget which could and likely result in the City losing about $16 million in provincial funding.

Or three, borrow the money from a $40 million fund set for road and bridges construction.  There could also be a combination of those options depending what the court decides.

Another creditor of Essar Algoma Steel, Port of Algoma, will be in court Thursday to make a plea for the money it is owed by the steelmaker. The company claims it has not been paid since April of 2016 and now owes $17 million it its creditor in missed interest payments.

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Craig Huckerby
Craig Huckerby is a seasoned broadcast and media professional with over 35 years in local media. Starting in television, Craig became known as "the weather guy" on local television before pioneering internet media in the Sault. Craig is credited for bringing local television back to the Sault via the internet in 2003 with LTVNEWS.COM and was instrumental in launching SooNews.ca and Local2.ca. Craig is happy to be part of the Sault's newest media team and website, SaultOnline.com

15 COMMENTS

  1. @bri….Toronto investors will buy cheap houses in Sault Ste Marie,since Wyne put new taxes on and rent controls.The new home owners will rent them out to Sault Ste Marie residents.Its a Wayne Wayne situation all around.She fixed hydro so now she will fix the housing problem too

  2. Are there any people in this town who actually understand what is going on? I’m amazed at the stupidity of the comments here and over at sootoday. Essar didn’t try and go bankrupt any more than the other owners did. Or did the union want to do it when they owned aao oak too? It’s the world economy. Steel sucks as a business. Get over it sheeple. If Essar closes it will be far worse. Housing will be decimated. Businesses will close their doors. The strips of land you drive on that masquerade as roads will be mostly pot holes. Personally I’d be getting out of town before the crash. At least right now you have a chance to sell your house.

  3. The reality is finally coming home to roost. The horse that the one horse town that has ridden for so long, may finally unhitch its saddle and walk off into the sunset. That WILL mean realistic taxes to support unrealistic gov’t jobs at all levels. Municipal, provincial and federal. Reduced population, reduced employment means a reduced tax base. Blame the 3 (?) various owners of an internationally dying industry, blame the greedy investors that want a return on their investment to try operating such a dinosaur, blame the greedy union that milked profits dry, blame the CCAA-presiding judge, blame all 3 levels of gov’t. Lots of blame to go around. But when the City says they don’t have the money, they don’t have to look too far to figure out how to balance reality with the decreasing population and declining tax base. All those firefighters, EMT, hospital, teacher, gov’t offices/services and police unions could care less. They want unrealistic conditions, and they will DEMAND residential tax increases to maintain their status quo. This will all go back on YOU…the private sector employed house-owner…your business will not flourish in this environment, and you will soon be out the door. It is a spiral that will have unfortunate, but foreseeable, futures. Look around at other remote communities that have met similar fates. Many examples across this country. Newfoundland is entire province as an example. Writing is now on the wall. And it does not spell “prosperity”.

    • Wow Burn-E! It’s not even council night. Good job blaming the unions everytime you post. I think we all get the fact that you don’t like unions.
      You are however correct about relying on one industry. This city, which I wonder if you grew up here, does need more diversity in the workforce. So are you suggesting we get rid of the firefighters, EMS, hospitals, teachers, gov’t offices/services and police and then just let everyone fend for themselves? Little house on the Prairie style? Go see the bartender and get your teeth pulled. Give everyone a gun to protect themselves?
      Can you provide some exact towns so we can compare and see what will happen here in the Sault? Your wisdom always shines on here.
      thanks buddy

  4. A company like ESSAR that refuses to pay its taxes does not deserve to have the arena named after them I still prefer the original name…. SAULT MEMORIAL GARDENS…anything but ESSAR please.

  5. I guess this statement will ruffle feathers.
    I have a friend that works for the city. When this person works OT they get a voucher at north 82 for lunch for 2 plus tickets to the hounds games. At tumes they get tickets to concerts for OT. Maybe unnecessary spending should stop instead of relying on 1 business for cash flow. The Saults taxes are the highest in Canada. The gas prices are one of the highest in Ontario.
    I dont agree with the horrible way Essar has blown there money but i donot agree with city halls waste of funds. Stop spending what you don’t have.

    • Blown it?
      You mean the way they used underhanded practices and creative accounting to make it disappear from here into their corporate bank accounts offshore?

  6. If they can lay off 80-150 city employees why haven’t they. It is our tax that is paying these wages. Hard times are the same for everyone. This is no different then when thousands of us lost our jobs at Algoma Steel and had our futures shattered.

  7. Like we didn’t know this was coming, thanks to the corporate thieves known as “Essar”, and no thanks to the sloppy management of the situation at city hall, either.
    Do you want to tear those signs off the arena more than ever now? People are going to be leaving this city in droves as it will be unaffordable to live in any longer.
    Now are you happy that you sold the city’s soul to the devil, city hall?

    • No doubt, but who in their right mind would want to buy?
      Remember the discussion about the real estate bubble about to burst?
      It’s about to come to reality.
      People will be left holding mortgages for double what their homes are worth and not be able to afford the taxes.

  8. The City should have been collecting these taxes long before they got to the $20 million dollar mark. If there needs to be layoffs, start with those irresponsible enough not to do their jobs collecting this money while the amount was smaller.
    Personally, to keep people working I would advance the City a couple hundred bucks to be taken off future tax bills. The Sault is about to close for business if the taxes aren’t paid. This city council group has been surrounded with nothing but turmoil since they took office. Remember them at election time.

  9. Essar hasn’t paid taxes since April 2014 but it’s taken three years for City Hall to come up with a plan for the taxes they haven’t received. They could have not spent whatever percentage of taxes they didn’t receive the last time Algoma Steel went into bankruptcy but instead City Staff and City Council spent everything they didn’t collect, increased taxes by 6% since 2014 (compared to 2.5% inflation over that time) and did nothing to manage expenses. We have been failed by a City Council that is not interested in financial management. Instead, the burden will again fall on taxpayers when this could have been dealt with by doing more than the current plan of hoping for the best.

  10. TAXPAYERS were disgusted with the PRESENT tax hike…there is no way a 20 percent hike is going to fly. Layoffs will have to happen as unfortunate as that is.

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