Town suing OCI

Dave Bartlett
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Company owes $1.5M in back taxes; minister 'concerned'

Marystown is suing one of its largest corporate citizens for not paying its taxes.

According to court documents, Ocean Choice International (OCI) owes property, business and water taxes for 2008 and 2009, to a total exceeding $1.5 million on its fishplant.

This comes after news the company has asked the province to allow it to send more yellowtail flounder to China for processing, to make the plant profitable.

Marystown is suing one of its largest corporate citizens for not paying its taxes.

According to court documents, Ocean Choice International (OCI) owes property, business and water taxes for 2008 and 2009, to a total exceeding $1.5 million on its fishplant.

This comes after news the company has asked the province to allow it to send more yellowtail flounder to China for processing, to make the plant profitable.

Marystown Mayor Sam Synard told The Telegram the town's tried everything else to get the back taxes before filing a lawsuit.

"We would not rush into a Supreme Court case without having tried every step along the way to solve it before that point," he said. "We were hoping to get this solved without going to court, and we still are to some degree."

Synard said the town has sent a number of letters to the company and has had face-to-face meetings with its officials.

But Ocean Choice CEO Martin Sullivan said the tax issue is one of fairness.

"We have successfully negotiated tax agreements with all the (other) communities we operate in," he said.

Sullivan claims the Marystown plant is the highest-taxed fishplant in the province by far.

He's also hoping both sides can come to an amicable agreement.

"We've been back and forth with proposals and discussion with the town to try and negotiate a more reasonable rate," Sullivan said.

And he said OCI has paid the town $50,000 a year for the last two years.

"We hope we'd have a bit more understanding from the town," Sullivan said.

"We do want a long-term solution for Marystown. We think it's a very important employer in the town and regional area."

Synard said he's disappointed such a large company hasn't already paid its taxes.

"It's very shocking to us, to be quite frank," he said.

Even though the town has been blessed with healthy finances for the last two decades, Synard said OCI can't be let off the hook when the town's other large businesses faithfully pay their taxes each year.

OCI recently asked provincial Fisheries Minister Clyde Jackman to allow it to ship Yellowtail smaller than 450 grams- about a pound- to China for processing.

OCI claims it's not economical to process the smaller fish here and it's already allowed to export fish 380 grams or less.

If the company gets the exemption, it can keep about 250 workers - about what it employs now - on the payroll for 35 weeks a year.

But if the exemption is turned down, it has told the minister it will either cut 100 jobs and reduce the time the plant is open to 20 weeks a year, or possibly close down completely.

Sullivan said the two issues are not related and it's unfortunate they've surfaced at the same time.

Economic factors such as the recession, low fish prices, the Canadian dollar and the cost of fuel are also contributing factors to "quite substantial" financial losses at the plant, Sullivan said.

"We do believe in the long term," Sullivan stated.

"But we have to survive in the short term."

Jackman went to Marystown on Sunday to speak with workers and get their input. He said the local union feels the workers need the 35 weeks.

As for the tax arrears, Jackman said he's been made aware of what's going on as the district's MHA.

The Telegram asked the minister if he is concerned for the future of the plant in Marystown.

"I certainly am," he said.

"Anytime you see a facility like that, that may be threatened, of course you are concerned."

Jackman said his family resettled to Marystown in 1968 because of the fishplant, which shows how long it's been a going concern.

He said he hopes both sides can reach an agreement.

dbartlett@thetelegram.com

Organizations: Supreme Court

Geographic location: Marystown, China

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Recent comments

  • James
    July 02, 2010 - 13:35

    So you applaud capitalists who avoid paying the taxes they owe at the detriment of the community that supports that company? Yeah, did you use the public roads today? If you're so keen on low corporate taxes and business friendly environments, may I direct you to number of ''Free Trade Zones'' in the third world? Don't expect minim wages or holidays (there are none), or employee rights (there are none). Hey, at least you won't have to pay union dues! Yep, capitalism at its finest!

  • JesMond
    July 02, 2010 - 13:34

    Wow, Don. Going to bat for a company that is skipping out on paying its fair share. So who do you expect shoud make up the shortfall?

  • don
    July 02, 2010 - 13:30

    Why does Marystown need $1.5 million dollars from any business in the town? I suspect that Marystown is determined to turn itself into a ghost town.This is typical behavior of many Municipal Governments in Newfoundland. Many rural and even urban business communities are hanging on by their financial fingertips. Instead of Town Councils reducing taxes and regulations to encourage the establishment of new business or the maintenance of existing business in their communities they are mindlessly imposing onerous rules, regulations, red tape, exorbitant property taxes and water and sewer fees during an economic downturn. Once business owners and developers get the idea that Town Councils will impose onerous regulations and taxes on them and are willing to sue businesses that provide employment in their towns, these business owners and developers will close up, move away and stay away. Mindless bureaucratic behavior will be the beginning of the end of the that town! Some Town Councils I understand are maintaining major cash surpluses. That only happens when the tax rates are too high. Municipal Government should not be run for profit and should not be permitted to accumulate surplus margins acquired by high taxation. I also hear that some town councils are driving businesses out, expropriating land and setting up their own projects like marinas, industrial and business parks to gain profit for the town. Clearly, some people in the provincial government and municipal governments have graduated from some school that teaches them the ideals of socialism and communism. Regrettably, these bureaucrats and councilors have been empowered to destroy the capitalism that has built our society from the stone age to the space age. It appears that these zealots are determined to return us to the stone age! I would much prefer to deal with a business run by a capitalist than deal with a business with a bureaucrat in charge. We apparently don't give much thought about what kind of government we elect and now we must suffer the consequences.

  • Stamp
    July 02, 2010 - 13:30

    What Minister Jackman is facing is called the thin edge of the wedge. Of course, the Marystown workers would prefer less work over no work at all - which is the choice being offered by Ocean Choice. The larger issue for Mr. Jackman is whether his decision to grant the exemption to OCI (which decision appears to have been made already) will open the flood gates to a hundred other such requests. When it comes to the costs of production, China is like a black hole that sucks in everything in its wake. If Jackman bows to the forces of gravity, the longterm picture for Newfoundland's fish processing sector is gloomy. We will become little more than a place to take on fuel, water and grub (if that) and to offload raw material for shipment to China. This province has very little influence in Canada's management (mismanagement) of our fish stocks. It's only real leverage for extracting some local economic benefit from what should be our own resource is to ensure that the processing takes place here. Rather than cave into requests for the exportation of raw materials, Jackman needs to undertake a major productivity review of the processing sector. That should be followed by a plan to remake seafood processing in this province in a way that protects it from low cost labour competitors like China. That probably means a great deal more mechanization, modernization, and other cost cutting measures. NL needs to invest far more heavily in an industry that is under severe threat and with it, the existence of outport Newfoundland. That the provincial government hasn't already done so is no doubt a reflection of its belief that the feds are responsible for the industry and since they broke it, they should fix it. That is not likely to happen. The reality is that our fish have long since become a currency of convenience to repay the political debts of whatever party is in power. That is why we see inexplicable allocations of fish to other provinces and to other countries. One small example of that was the announcement by Ms. Shea - almost immediately after her appointment as minister - that she was transferring shrimp quotas from NL to her home province. Left to Ottawa and to its own devices, the fish processing sector in this province has a bleak future.

  • Mad
    July 02, 2010 - 13:26

    That makes me mad to know that the Pennys OCI with all it all it $Bs in assets and companies, would want to screw a town such as this, and threaten to affect it employees like that. Get real Mr. Martin and be satified with the money youre getting in return and continue to be descent to your employees. Every other company has to pay, and why shouldn't you. Maybe if Dominion got the same concession that you are after, they would still be in business. Maybe there's too much greed here. I dont want my tax dollars going to support you guys. You just want more immediate profit and less for Nfld.

  • Jerome
    July 02, 2010 - 13:26

    The Overpass Syndrome.
    I doubt Don has been out that far yet.

  • W
    July 02, 2010 - 13:26

    I agree with don, cut the taxes to zero, roll back wages to compete with China. Let OCI be profitable.

    Who is Martin Sullivan's brother anyways?

  • James
    July 02, 2010 - 13:23

    Oooh, red baiting. As I said before, if you are so staunchly pro-capitalist (not that you are a capitalist) I would invite you to move to one of these Maquila jurisdiction where the upper class is not burdened with high taxes, health and safety laws, or environmental standards. Likewise, workers are not burdened with unions, minimum wages, decent sanitation, healthcare housing, schools, or time to themselves. Naturally, the owners and management, have a very high standard of living as they are benefactors of leaching off the workers. Here, we have a model that presents us with a libertarian utopia (or a 19th century Manchester) Another thing that you wouldnt have to deal with is democracy, as a ruling elite wouldnt stand a chance against a politicized working class. (or and your point on the Soviet Union demonstrates that you either know nothing of socialsim or the Soviet Union -- I would put my money on both).

  • Paul
    July 02, 2010 - 13:22

    Let Penney pay his tax bill, he has been spoon fed for long enough. If property tax can go up, and we have topay, let business share in as well.

  • James
    July 02, 2010 - 13:20

    So would it be fair then, Don, to assume that, as you have never made use of the public welfare system, you are somehow representative of a private school?

  • Mario
    July 02, 2010 - 13:20

    All current forms of government are corrupt, but in my opinion, capitalism is far worst than socialism. Capitalism is solely based on greed. Greed leads to resent, resent leads to hate, hate leads to war. So basically, capitalism is the primary cause of war, and has been for eons. People twist things like religion and law to appeal to their capitalist ideals, but it all has to do with their own personal greed.

  • Jerome
    July 02, 2010 - 13:20

    Local governments have been forced over the last ten years or so to stand on their own two feet.
    People on fixed incomes have seen their taxes double, in some cases, because their council no longer received operating grants from government. This all started when the Chretien government was in the midst of eliminating the deficit they inherited from a conservative government and while doing so, cut back transfer payments to the provinces. Our province had no choice but to download previous provincial responsibilities to the municipalities.
    Municipal councils today are expected to provide adequate levels of services to their towns and these services have to be paid for by the residents and businesses in the town. That is probably the main reason so very few people seek municipal office in rural communities.
    If rural Newfoundland and Labrador is to survive, they must not be hamstrung in their efforts to raise the funds they need to operate their communities. After all, they are on their own.

  • don
    July 02, 2010 - 13:19

    What baloney! These opinions and attitudes are the result of decades of of Government handouts, 42 weeks of EI payments for 10 weeks on make-work projects and lifelong welfare for the laziest of the lazy. Marystown will end up just like the crowd in Grand Falls Windsor who were left begging for handouts from Danny Millions when Abitibi was forced to close and move out of town. Marystown will be in the same financial hole as Grand Falls when OCI pulls up stakes and leaves. Maybe somebody in the town of Marystown wants to seize the assets of OCI in order to use their building for a Government subsidized museum and use the company assets as collateral for obtaining Government Grants from ACOA! It seems the plan is to tax and regulate your main employers into bankruptcy. You folks haven't got a clue! It seems that you deeply resent the hand that feeds you. That is the surest way to starvation. No wonder no permanent development ever occurs in rural Newfoundland. Good luck with attracting and keeping business and development in your town. It appears that taxing and regulating major employers into bankruptcy is the prevailing attitude of the people who claim to want employment in rural Newfoundland. I think that business owners and developers who are planning to set up operations in rural Newfoundland should rethink that idea fast!

  • don
    July 02, 2010 - 13:14

    To James from NL: Well, well, well, I managed to get one of the neo-comms to surface. What town council do you sit on? This issue is not only about taxation which is out of control, it borders on legislatively sanctioned extortion! When all of the main creators of employment in this Province have had enough of being gouged by petty bureaucrats and mini-dictators posing as town councils, they will close up shop and leave, who will create the jobs and undertake the development in Newfoundland then buddy? Oh, I know, the Government will create the jobs and development under its terms and conditions. If I remember correctly, the Soviet Union tried that approach and failed miserably. Welcome to your future, Comrade.

  • Thomas
    July 02, 2010 - 13:11

    Well, Don, your arguments are very persuasive. Profits before people! You've got me convinced -- I'll vote for the next socialist who comes along.

  • Heather
    July 02, 2010 - 13:10

    Are the outstanding taxes legitimate?(i.e assessed at the appropriate mil rate)

  • James
    July 01, 2010 - 20:25

    So you applaud capitalists who avoid paying the taxes they owe at the detriment of the community that supports that company? Yeah, did you use the public roads today? If you're so keen on low corporate taxes and business friendly environments, may I direct you to number of ''Free Trade Zones'' in the third world? Don't expect minim wages or holidays (there are none), or employee rights (there are none). Hey, at least you won't have to pay union dues! Yep, capitalism at its finest!

  • JesMond
    July 01, 2010 - 20:23

    Wow, Don. Going to bat for a company that is skipping out on paying its fair share. So who do you expect shoud make up the shortfall?

  • don
    July 01, 2010 - 20:18

    Why does Marystown need $1.5 million dollars from any business in the town? I suspect that Marystown is determined to turn itself into a ghost town.This is typical behavior of many Municipal Governments in Newfoundland. Many rural and even urban business communities are hanging on by their financial fingertips. Instead of Town Councils reducing taxes and regulations to encourage the establishment of new business or the maintenance of existing business in their communities they are mindlessly imposing onerous rules, regulations, red tape, exorbitant property taxes and water and sewer fees during an economic downturn. Once business owners and developers get the idea that Town Councils will impose onerous regulations and taxes on them and are willing to sue businesses that provide employment in their towns, these business owners and developers will close up, move away and stay away. Mindless bureaucratic behavior will be the beginning of the end of the that town! Some Town Councils I understand are maintaining major cash surpluses. That only happens when the tax rates are too high. Municipal Government should not be run for profit and should not be permitted to accumulate surplus margins acquired by high taxation. I also hear that some town councils are driving businesses out, expropriating land and setting up their own projects like marinas, industrial and business parks to gain profit for the town. Clearly, some people in the provincial government and municipal governments have graduated from some school that teaches them the ideals of socialism and communism. Regrettably, these bureaucrats and councilors have been empowered to destroy the capitalism that has built our society from the stone age to the space age. It appears that these zealots are determined to return us to the stone age! I would much prefer to deal with a business run by a capitalist than deal with a business with a bureaucrat in charge. We apparently don't give much thought about what kind of government we elect and now we must suffer the consequences.

  • Stamp
    July 01, 2010 - 20:17

    What Minister Jackman is facing is called the thin edge of the wedge. Of course, the Marystown workers would prefer less work over no work at all - which is the choice being offered by Ocean Choice. The larger issue for Mr. Jackman is whether his decision to grant the exemption to OCI (which decision appears to have been made already) will open the flood gates to a hundred other such requests. When it comes to the costs of production, China is like a black hole that sucks in everything in its wake. If Jackman bows to the forces of gravity, the longterm picture for Newfoundland's fish processing sector is gloomy. We will become little more than a place to take on fuel, water and grub (if that) and to offload raw material for shipment to China. This province has very little influence in Canada's management (mismanagement) of our fish stocks. It's only real leverage for extracting some local economic benefit from what should be our own resource is to ensure that the processing takes place here. Rather than cave into requests for the exportation of raw materials, Jackman needs to undertake a major productivity review of the processing sector. That should be followed by a plan to remake seafood processing in this province in a way that protects it from low cost labour competitors like China. That probably means a great deal more mechanization, modernization, and other cost cutting measures. NL needs to invest far more heavily in an industry that is under severe threat and with it, the existence of outport Newfoundland. That the provincial government hasn't already done so is no doubt a reflection of its belief that the feds are responsible for the industry and since they broke it, they should fix it. That is not likely to happen. The reality is that our fish have long since become a currency of convenience to repay the political debts of whatever party is in power. That is why we see inexplicable allocations of fish to other provinces and to other countries. One small example of that was the announcement by Ms. Shea - almost immediately after her appointment as minister - that she was transferring shrimp quotas from NL to her home province. Left to Ottawa and to its own devices, the fish processing sector in this province has a bleak future.

  • Mad
    July 01, 2010 - 20:14

    That makes me mad to know that the Pennys OCI with all it all it $Bs in assets and companies, would want to screw a town such as this, and threaten to affect it employees like that. Get real Mr. Martin and be satified with the money youre getting in return and continue to be descent to your employees. Every other company has to pay, and why shouldn't you. Maybe if Dominion got the same concession that you are after, they would still be in business. Maybe there's too much greed here. I dont want my tax dollars going to support you guys. You just want more immediate profit and less for Nfld.

  • Jerome
    July 01, 2010 - 20:13

    The Overpass Syndrome.
    I doubt Don has been out that far yet.

  • W
    July 01, 2010 - 20:12

    I agree with don, cut the taxes to zero, roll back wages to compete with China. Let OCI be profitable.

    Who is Martin Sullivan's brother anyways?

  • James
    July 01, 2010 - 20:08

    Oooh, red baiting. As I said before, if you are so staunchly pro-capitalist (not that you are a capitalist) I would invite you to move to one of these Maquila jurisdiction where the upper class is not burdened with high taxes, health and safety laws, or environmental standards. Likewise, workers are not burdened with unions, minimum wages, decent sanitation, healthcare housing, schools, or time to themselves. Naturally, the owners and management, have a very high standard of living as they are benefactors of leaching off the workers. Here, we have a model that presents us with a libertarian utopia (or a 19th century Manchester) Another thing that you wouldnt have to deal with is democracy, as a ruling elite wouldnt stand a chance against a politicized working class. (or and your point on the Soviet Union demonstrates that you either know nothing of socialsim or the Soviet Union -- I would put my money on both).

  • Paul
    July 01, 2010 - 20:06

    Let Penney pay his tax bill, he has been spoon fed for long enough. If property tax can go up, and we have topay, let business share in as well.

  • James
    July 01, 2010 - 20:03

    So would it be fair then, Don, to assume that, as you have never made use of the public welfare system, you are somehow representative of a private school?

  • Mario
    July 01, 2010 - 20:03

    All current forms of government are corrupt, but in my opinion, capitalism is far worst than socialism. Capitalism is solely based on greed. Greed leads to resent, resent leads to hate, hate leads to war. So basically, capitalism is the primary cause of war, and has been for eons. People twist things like religion and law to appeal to their capitalist ideals, but it all has to do with their own personal greed.

  • Jerome
    July 01, 2010 - 20:02

    Local governments have been forced over the last ten years or so to stand on their own two feet.
    People on fixed incomes have seen their taxes double, in some cases, because their council no longer received operating grants from government. This all started when the Chretien government was in the midst of eliminating the deficit they inherited from a conservative government and while doing so, cut back transfer payments to the provinces. Our province had no choice but to download previous provincial responsibilities to the municipalities.
    Municipal councils today are expected to provide adequate levels of services to their towns and these services have to be paid for by the residents and businesses in the town. That is probably the main reason so very few people seek municipal office in rural communities.
    If rural Newfoundland and Labrador is to survive, they must not be hamstrung in their efforts to raise the funds they need to operate their communities. After all, they are on their own.

  • don
    July 01, 2010 - 20:02

    What baloney! These opinions and attitudes are the result of decades of of Government handouts, 42 weeks of EI payments for 10 weeks on make-work projects and lifelong welfare for the laziest of the lazy. Marystown will end up just like the crowd in Grand Falls Windsor who were left begging for handouts from Danny Millions when Abitibi was forced to close and move out of town. Marystown will be in the same financial hole as Grand Falls when OCI pulls up stakes and leaves. Maybe somebody in the town of Marystown wants to seize the assets of OCI in order to use their building for a Government subsidized museum and use the company assets as collateral for obtaining Government Grants from ACOA! It seems the plan is to tax and regulate your main employers into bankruptcy. You folks haven't got a clue! It seems that you deeply resent the hand that feeds you. That is the surest way to starvation. No wonder no permanent development ever occurs in rural Newfoundland. Good luck with attracting and keeping business and development in your town. It appears that taxing and regulating major employers into bankruptcy is the prevailing attitude of the people who claim to want employment in rural Newfoundland. I think that business owners and developers who are planning to set up operations in rural Newfoundland should rethink that idea fast!

  • don
    July 01, 2010 - 19:52

    To James from NL: Well, well, well, I managed to get one of the neo-comms to surface. What town council do you sit on? This issue is not only about taxation which is out of control, it borders on legislatively sanctioned extortion! When all of the main creators of employment in this Province have had enough of being gouged by petty bureaucrats and mini-dictators posing as town councils, they will close up shop and leave, who will create the jobs and undertake the development in Newfoundland then buddy? Oh, I know, the Government will create the jobs and development under its terms and conditions. If I remember correctly, the Soviet Union tried that approach and failed miserably. Welcome to your future, Comrade.

  • Thomas
    July 01, 2010 - 19:47

    Well, Don, your arguments are very persuasive. Profits before people! You've got me convinced -- I'll vote for the next socialist who comes along.

  • Heather
    July 01, 2010 - 19:45

    Are the outstanding taxes legitimate?(i.e assessed at the appropriate mil rate)