CENTRAL MANITOULIN—While the Michael’s Bay township site in Tehkummah has been the centre of attention through the past few years following the seizure of the property as proceeds of crime by the Canadian government on behalf of the Kingdom of Belgium, a number of the properties owned by the Vandroemme family and Eso Agri Canada were farms located in Central Manitoulin. It was announced at the June 11 Central Manitoulin council meeting that the municipality had received good news from the Seized Property Management Directorate in the form of an agreement to pay at least $56,000 in back taxes owing on the seized properties and that the balance of interest and penalties would be negotiated.
“We received a letter that indicated that they took consideration of our concerns,” said CAO Ruth Frawley. “They had sent us a letter that led us to believe that there is some wiggle room.”
Interest charged on outstanding taxes tends to run around 15 percent a year, noted the clerk. While the federal government was not prepared to pay the interest and penalties in full, they were sensitive to the fact that the municipality had incurred interest costs in financing the shortfall on the tax levy. “We don’t want to make a profit on this,” noted Ms. Frawley.
The total outstanding was roughly $79,000, and Public Works Canada has indicated that it will pay the principal of $56,000.
“Does this fall under PIL (payment in lieu)?” asked Councillor Alex Baran.
Ms. Frawley explained that PIL only kicks in once the federal government actually owns the properties in question (the federal government is not subject to municipal taxation, but usually provides compensation in the form of the PIL). “We will receive PIL from November 2015 onward (the properties were officially seized that November). But this is the amount from before that. Canada hadn’t taken control of the property before that, it was only acting as agent.”
“Will that impact on the current year?” asked Councillor Baran.
“We don’t know,” admitted Ms. Frawley, “but we will get our taxes.”
Algoma-Manitoulin-Kapuskasing MP Carol Hughes said that she was very happy when she heard the news. “My office has been working on this for a long time, it has been an issue since before I was elected,” she noted.
Ms. Hughes and her office became very active on the file on April 10. “I had spoken with Kathy Hougan at Municipal Services in Sudbury to get a better understanding of the issue,” she said. “We got some information on direction and passed on that information on April 15.”
The issue was murky at best, she noted, but the Municipal Act did indicate that taxes owing had to be dealt with before a property could be transferred. “There was some question as to whether one of the entities involved (municipalities owed taxes) had registered a lien on the properties,” she recalled. “It was not clear if they could collect all of the back taxes.”
Ms. Hughes said that she had advised the municipalities to “consult with a lawyer who specializes with taxes,” adding said that she was still waiting for some information to be provided by Public Works Canada. “I am waiting for a response from Danielle Pilon and research from the Parliamentary Library. Hopefully we will have something soon.”
Ms. Hughes noted that responses from government departments have been much slower following government cutbacks.
Ms. Hughes expressed surprise that Tehkummah Reeve Eric Russell would have been reluctant to approach her at her table at the Manitoulin Trade Fair, noting that she had approached both Central Manitoulin Reeve Richard Stephens and Michael’s Bay Historical Society President Ben Lentir about the issue at the fair.
“I was kept very busy with envelopes for processing passports and the petitions,” she admitted, but added that she was always prepared to discuss issues that concern the communities she serves.