Valemount Community Forest undergoing business restructuring

Dianne St. Jean
Valemount Community Forest undergoing business restructuring

Changes needed to meet growing economic development
The Village of Valemount and Valemount Community Forest Co. hosted an Open House at the Village Visitor Information Centre last Thursday evening, April 5 to introduce plans for the restructuring of Valemount Community Forest’s business operations.

VCF Manager Craig Pryor, as well as representatives Lindsay Parcells of Lidstone & Co. Law Corp and Stanley Mitchell of KPMG LLP, accountant for the Village, were on hand to take questions from the public.

Also in attendance were Mayor Jeannette Townsend, CAO Adam Davey, and Council representative to VCF Owen Torgerson. McBride Community Forest Manager Gene Runtz and Councillors Rosemary Hruby and Rick Thompson came up from McBride.

This business restructuring is being undertaken in response to the VCF’s growing economic development. While economic success is growing strong, it also carried with it certain tax and liability implications.

Currently the Village of Valemount is the sole owner of the Valemount Community Forest Corporation, and as a municipality, is not taxable. A municipality cannot earn more than 10% of its earning outside its borders. An excess of 90% earnings would subject the VCFC to corporate tax rates, eating into profits and revenue needed for operating costs.

Since most of the business is conducted outside Village boundaries, it was necessary to isolate those companies.

On the advice of and in consultation with KPMG and the Lidstone law firm, CAO Davey and VCF Manager Craig Pryor came up with a number of options to resolve these issues to bring forward to the VCF Board and Village Council for approval.

The approved option moving forward is to restructure Valemount Community Forest by separating its operations into two separate partnerships – the Valemount Community Forest Company General Partner Ltd. and Valemount Industrial Park Co.

The VCF Company will manage the Community Forest, such as overseeing timber licensing, etc. while the Commercial General Partner will manage commercial land operations, such as leasing to a number of operations within the Valemount Industrial Park, and assuming liabilities, relieving the Village of taxation and liability pressures.

For now the proposal is only in draft form; that is, it will not become official until approved by the Inspector of Municipalities Office, sometime in the early summer.

Once that is done, in order to remove liability from the Village of Valemount the appointed Village Councillors will no longer serve on the VCF Board of Directors.