5:22 p.m. update
The City of Sault Ste. Marie has issued the following news release:
The decision on the City’s motion for tax payment was released today.
Mr. Justice Newbould dismissed the City’s motion on the understanding that Essar Steel Algoma Inc. would commence paying City taxes at a rate of $350,000 per month.
It does not address any outstanding taxes.
The decision made today is being analyzed by the City’s Toronto lawyers and the internal City team. A further update will be provided as more information becomes available.
Original story 2:47 p.m.
Essar Steel Algoma will resume tax payments to the city to the tune of $350,000 a month, says Mayor Christian Provenzano.
"It's a start. It's certainly better than nothing. I would have preferred to see, in addition to the ongoing payment, some . . . reasonable amount for what's currently in arrears," said Provenzano.
As of last month, Essar Steel Algoma was $26 million in arrears, including the $14 million that was owed prior to the Companies’ Creditors Arrangement Act proceedings, which began in November of 2015.
The city was asking the court to make the steelmaker pay the $12 million in taxes racked up since CCAA protection began.
In an affidavit filed with the court, City Solicitor Nuala Kenney warned that if the city continued to not receive Essar Steel Algoma's tax payments it would be forced to take drastic measures by the end of June, including massive layoffs, tax hikes, capital spending cutsn and/or borrowing.
Essar must now pay $4.2 million a year, said the mayor.
"It's a start, it's going in the right direction. I think the mayor and council had a responsibility to stand up for the taxpayers of Sault Ste. Marie and we did that, and we'll keep working on it," said Provenzano.
More to come . . .