That Was No Victory Ring Tells Residents-Updated Video Added

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Mayoralty candidate Rory Ring penned the following open letter to the residents of Sault Ste Marie to address the Essar-Algoma Tax deal reached at a special city council meeting held Monday August 20th.

Ring doesn’t agree with the Mayor’s assessment that Essar-Algoma Tax deal was a victory.

The Mayor Cooks the Books on Failed Essar-Algoma Tax Deal
Time for Mayor to Come Clean on Real Numbers

Last night the community was told taxes owed by Algoma will be paid and the City and the Mayor achieved a great victory. The community was told that Essar-Algoma owed $23.8 Million and the City negotiated a settlement of $21.8 Million.  This is not true. The total taxes owed by Essar-Algoma from the time they went into CCAA until now is more than $36 Million and the city only got just over $20 Million. The Mayor is misrepresenting the facts.

I have been engaged with stakeholders on the Essar-Algoma tax file in my role as CEO of the Chamber.  I know the that there was no victory and in fact what the Mayor is shading as a victory is actually one of the biggest boondoggles in the history of this city.

The Mayor decided to hire high priced Toronto lawyers to sue Essar-Algoma and its lenders for unpaid taxes while Algoma was in CCAA. That decision cost the taxpayers $535,000. The lawsuit contributed absolutely nothing to the amount of the settlement and it was a pure waste of money and time.

The facts are complex, and I was disappointed that despite several attempts by various individuals to explain them to the Mayor, he either failed to understand them or he ignored the reality of the situation and he set out on a legal misadventure which cost the community more than half a million dollars—which by the way is roughly equivalent to a ½ percent tax increase on our city taxes.

The City, by provincial legislation, has a first claim if a company can’t pay its taxes.  This right is the equivalent of a lien on the lands of the company.  A city never has to sue to collect taxes.  Cities have a right to lien lands and get paid first. But the Mayor insisted on going to court rather that working out a plan to get paid.

At the time they went into CCAA, Essar- Algoma owed the city approximately $14 Million. Up to April of 2017 they racked up another $10.8 Million and the amount grew each month after that by approximately $650,000. The total amount Essar-Algoma was on the hook for was just shy of $36 Million. Not $23.8 as the Mayor would have you believe.

What you weren’t told was that prior to going into CCAA, Essar-Algoma filed appeals with the Assessment Review Board, which is where you go to appeal your MPAC assessment. Essar-Algoma was seeking a major reduction in the assessed value of their lands, and consequently a major reduction in the amount of taxes they would have to pay. The Mayor worked on this file directly with senior staff and a second set of lawyers from Toronto unnecessarily.

In April of 2017, Essar-Algoma won a substantial victory in its assessment appeal and the value of its land was dropped from $83MM to $39MM. While the Mayor had his eye off the ball fighting an unnecessary battle in Toronto courts, Essar-Algoma was winning a huge tax break at the Assessment Review Board.

According to the report filed with council last night the City will only be getting $20.4 Million from the deal and Algoma’s tax bill for the future will be drastically reduced.

Of course, it sounds like the Mayor did a great job by claiming the City is getting 92% of the amount owed. He is not telling you that the appeal the City lost and Essar-Algoma won, cut the tax bill substantially.  In reality, the city got hammered on the Essar-Algoma tax appeal and even after such a major loss, the Mayor couldn’t even collect 100% of the lower sum that they owed the city.

The Mayor is telling you that the settlement with Essar-Algoma will not impact services or taxes. That is also untrue. The city has already significantly raised the taxes of all the major employers in the community to make up for the shortfall from this major loss. Not only did the Mayor fail to stand up for local businesses he clearly demonstrated his indifference to the hardship and financial loss local employers faced.

The same local businesses and employers who lost more than $25 Million when Essar-Algoma went into CCAA are now on the hook thanks to the Mayor, to pay even more in taxes to make up for what the city lost from Essar-Algoma.

We now have the highest business tax rates in Ontario.  We might as well put up a sign that says: “Sault Ste. Marie—Don’t Invest Here.” We can no longer afford this kind of leadership at city hall.

All of the data in this letter is from affidavits and sworn testimony filed by the city in the CCAA case. If you would like, I can send you copies. Email me at [email protected]

 

Yours truly,

Rory Ring, Candidate For Mayor

 

20 COMMENTS

  1. If the new owner of the plant is in any way part of essar or essar global they should pay back all the money owed to businesses around town. My thought it is because of the scenery at the plant hasnt changed colors

  2. Last night the community was told taxes owed by Algoma will be paid and the City and the Mayor achieved a great victory. The community was told that Essar-Algoma owed $23.8 Million and the City negotiated a settlement of $21.8 Million. This is not true. The total taxes owed by Essar-Algoma from the time they went into CCAA until now is more than $36 Million and the city only got just over $20 Million. The Mayor is misrepresenting the facts.
    This is not true.
    City Council approved a negotiated settlement on Algoma’s back taxes that will give the city $21.8 million of the $23.8 million owed for the tax years 2014, 2015, 2016 and 2017. Plus The new Algoma will also pay 100 per cent of the $11.4 million in taxes owing since the steelmaker filed for protection under the Companies’ Creditors Protection Act. So that is at total 32.2 million.

    This is just a total spin

  3. Prior to all of this taking place, the Sault was already taking advantage of the fact that a large and sometimes profitable company, could not just pack up and move to a location with lower taxes. The tax rate for large industial properties was and still is, one of the highest in the country. It is the OMB that sets the assessment of the property, not the city. The city has been reaping the benefits of this for many years and what have they been doing with all of this revenue?

  4. If you think that the Algoma Steel property is appropriate for tax sale under municipal law you aren’t thinking all that clearly Mr. Ring. The Algoma Steel lands vs. residential/commercial property are apples and oranges. Not a huge market out there for environmental wastelands last I checked, not to mention the intent all along was to maintain an operating Steel plant…you know…to maintain jobs for citizens, not assist in its demise. We are not talking about a house that has tax arrears, the Steel plant property might as well be mars.

    And don’t be fooled by the buzzwords, PPSA he talks about doesn’t even apply to land, https://en.wikipedia.org/wiki/Personal_Property_Security_Act_(Canada)

  5. Very informative letter. Just goes to show how the Mayor and Council have been spinning everything since they were elected. It is nice to see someone who can tell it like it is, even if it isn’t favourable.
    You have our vote!

  6. Sault Ste Marie-“As the mayor of the community I have to make sure I work through those issues in the best interest of the community and I’m confident I did so in accord with council’s direction and in working with city staff,” Provenzano said, adding it is unfortunate that Ring would use this issue to attack his integrity.
    Hmmmmm?

    OTTAWA—Hate speech and the politics of division are creating a “dangerous path” for Canada, Prime Minister Justin Trudeau said Monday as he vowed to steer clear of such roads and to continue calling out those who rely on “extremist” methods to make their voices heard.

    • “My integrity and my honesty means a lot to me and my family name means a lot to me and I would never do anything to tarnish either,” he countered. “I stand by every statement in that slide” which was reviewed by several senior staff”
      Mayor Christian Provenzano

      “This is a calculated Liberal strategy to avoid accountability and shut down legitimate criticism of their appalling record.”

      Andrew Scheer

  7. this was soooooo complicated, the tax payer will never know the truth. Too much hidden details by the courts. I’m sure files have been destroyed already. Thanks Rory Ring for presenting hidden details. Lets see if there is a response. I knew this was a bad deal. Now will out taxes drop any?

    You can’t have lawyers sit on council and expect anything fair for the taxpayer. Its only for the political gain and a bigger resume.

  8. It is very sad when taxpayers are conned by the Mayor and council. The question is…were we conned or is Mr. Ring looking for ways to boost his candidacy? It is difficult for the average sooite to know all the facts and details..we really are a trusting bunch. I await the Mayors response.

  9. Our liberal Mayor liberal stretches the truth? Say it ain’t so.

    ” We can no longer afford this kind of leadership at city hall.

  10. Sounds like he’s crying and playing the blame game.

    A separate board assessed the value of the property… so that loss does not belong to the Mayor even though that money was budgeted. The drop in value had nothing to do with anyone and companies across the country are doing it. Being able to claim $20M from any company going out of business is a feat and should be applauded. Lets hope that the local companies can also get some monies owed to them.

    • Sorry but they aren’t getting the money from a company going out of business, they are getting it from the new company that agreed to take over Essars debt..That was made abundantly clear at the meeting last night…Essar just walks away from it all, and I think if one would dig deep enough you would still find Essar Global in the new mix…

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