A process called “closure allowance” could reduce the assessed value of Domtar’s Crofton pulp mill, thereby reducing its property taxes to North Cowichan.

Currently, BC Assessment values the 133-hectare mill site at $177,377,300 — including $36,116,000 for land and $141,261,300 for buildings.

That’s up from $162,125,100 the previous year.

But when a major industrial plant goes down, it can apply for assessment relief to reduce property taxes.

“Closure allowance reduces the improvement value to 10% of the cost,” says BC Assessment. “In other words, depreciation is increased to 90%.”

That would apply to the buildings portion of the site’s assessed value.

The plant must be permanently closed on or before October 31 of any year to qualify for closure allowance in the succeeding year — making it too late for Domtar to obtain relief in 2026.

The company said Wednesday: “We will be reaching out to the Assessment Branch once we have completed our work to secure the site. They will evaluate the site and determine the appropriate tax classification for the land and improvements.”

But this would be the second closure allowance for the company at the Crofton site, after it earlier curtailed its paper operations: https://www.domtar.com/paper-excellence-canada-to-indefinitely-curtail-paper-operations-at-catalyst-crofton-mill/ .

On Thursday, North Cowichan told sixmountains.ca: "Domtar Crofton Mill has applied to BC Assessment for Closure Allowance for the paper side of their facility. This reduced valuation will be for the 2026 tax year. Initial estimates indicate a $25.4 million lower value for their mill property. This would amount to an approximate loss of $800,000 in tax revenue."

Mayor Rob Douglas said Tuesday the mill is the municipality's "biggest single taxpayer, roughly $5 million a year. To lose that tax revenue is devastating. It's a significant revenue source for our core services here at the municipality."

Meanwhile, Geoff Dawe, national president of the Public and Private Workers of Canada, issued the following statement Wednesday: "The company said the mill will cease operations on December 15, although will continue to employ workers at the site until February 2026."

Dawe added: "The road ahead will be difficult. But we have faced heartbreak before and emerged stronger through unity and purpose. We will do so again."

Asked Thursday if there was any chance employees could take over the mill, he said: "It's a viable mill, there's always a chance. All options will be pursued."

Douglas said: "Several residents have suggested the Harmac model as a path forward, and I've discussed it with the union leadership as well. Interestingly, both the Premier and Forests Minister raised it during our meeting earlier this week. I don’t want to create any unrealistic expectations, but if there's a way to create an employee ownership model, that would be a big win for the workers and our community."

(Harmac: https://thetyee.ca/News/2013/09/23/BC-Mill-Success-Story/ )

sixmountains.ca reported Tuesday that the Crofton pulp mill would be permanently closed in mid-December. About 350 employees are impacted.

Read more: https://www.sixmountains.ca/article/0f9c834f-cdd9-4d14-89f3-3040e4386893

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— Larry Pynn, Dec. 3, 2025 (Updated Dec. 4)