A Newfoundland town has come up with a tax plan that could have implications for fishermen across Atlantic Canada and beyond – negative implications, according to the fishermen.
The Springdale, Newfoundland, town government has decided that taxing fishermen as businesses is a good way to increase revenue. Fishermen respond that the tax is wrong-headed and shortsighted for the town itself.
The town council in March decided that since fishermen were using town facilities, they should be taxed as businesses. The proposal was part of an overall budget plan, according to town manager Daphne Earle. She then referred additional questions to Michael Drover, an attorney in St. John’s, Newfoundland, saying that the matter was in litigation and “likely to end up before the Supreme Court.”
Drover said that the town has provincial tax legislation on its side and that fishermen, who are now making more money than in earlier years, should bear some of the town’s severe tax burden. “Where fishermen used to work a few lines from skiffs,” she said, “now they have sophisticated boats and equipment, which enables them to make a lot more money.”
Reg Anstey, secretary-treasurer of the Fish, Food and Allied Workers Union, doesn’t see it that way.
“For one thing, I don’t think the town realizes it will be bad for them,” Anstey said. “They’re shooting themselves in the foot. If they insist on this tax, fishermen are just going to work out of a different harbor. Instead of getting more income, the town is going to get a lot less. If they force fishermen out, the town is the loser. And if that happens, what happens next? What happens to the town’s taxes, period?”
The issue goes deeper than the town’s economy, Anstey said. “This whole idea is ludicrous,” he said. “The fact of the matter is that a fisherman makes a living from the high seas. Most communities would welcome fishermen and not charge them [business] taxes. Let’s face it, the federal government has been downloading costs on us – quota taxes, licenses and the like – and now everybody wants to put his hands in the fisherman’s pocket.”
Attorney Drover, who will be prosecuting local fishermen who say they have no intention of paying the tax, has no misgivings about the levy.
“The fact of the matter is that municipalities are at the bottom of the fiscal pecking order,” Drover said. “Right now the town’s only source of revenue is the property tax and the business tax. Fishermen use town facilities so they should help pay for maintenance. We’re talking about the survival of municipal services such as garbage and snow removal here, for example, and provincial support is decreasing all the time.”
Drover cited Chapter M-24 of the Municipalities Act of 1999 as support for the tax levy. Part of the text in fact reads, “…a council shall impose an annual tax, to be known as ‘the business tax,’ on all businesses carrying on business in the municipality.”
The Act defines “business” as (i) a commercial, merchandising or industrial activity or undertaking, (ii) a profession, trade, occupation, calling or employment, (iii) an activity which provides goods or services ….”
Fishermen are becoming incorporated,” Drover said. “So they are operating as businesses; it’s as simple as that.”
As for the litigation, Drover says, “The Town of Springdale made a tax proposal, and the fishermen have refused to pay. So we’re undertaking litigation to collect the tax.”
Anstey counters, “The town has its facts wrong. Fishermen earn their living hundreds and hundreds of miles from Springdale; they’re nowhere near the town boundaries.”
He added that while today’s boats are more efficient than skiffs, they’re also a lot more expensive – both to purchase and to maintain. “A fisherman also has to spend thousands and thousands of dollars before he even sets out on his first trip,” Anstey said. “Licenses, insurance, you name it. Insurance alone can cost you $20,000.”
Anstey sees the tax as a “money grab, pure and simple. And the town is showing us a total lack of commitment to the fishing industry, not realizing that it’s in their own best interests to support it.”
He concludes, “We’re working hard to kill this; hopefully common sense will prevail.”
