Gordon/Barrie Island seeks to terminate water treatment plant rate agreement with Gore Bay

Gordon/Barrie Island

GORDON—Gordon/Barrie Island Township has given notice to the Town of Gore Bay that it wants to terminate and update the current water treatment plant rate of taxation agreement.

“Our council wants to reevaluate the agreement and feel that it needs updating,” said Gordon Reeve Lee Hayden. “The original agreement wasn’t a good agreement. For instance, there was no method for either the town or our municipality to withdraw.”

Reeve Hayden said that the agreement needs updating. He explained that when the water treatment plant was built (on property in Gordon/Barrie Island) we understood that we couldn’t charge the town or payment in lieu. Gordon/Barrie Island has only charged 20 percent of the tax rate to the town, “which doesn’t represent equal taxation for the municipality.  We are billing the town 20 percent of the tax rate on the building which council feels is unrealistic, and there is no clause in the agreement to terminate the agreement.” 

“We are just letting the town know that, as of December 2022, the current contract agreement will be null and void,” said Reeve Hayden. However, “we definitely want to sit down and hold discussions on the agreement and update it.”

The Expositor has learned that in 2008, when the agreement was reached, water users in Gordon/Barrie Island were paying more than water users in Gore Bay, but this was changed so that the rates for water users were the same in both municipalities (with the town paying a reduced fee of 20 percent of the tax rates on the waterfront treatment plant property located in the neighbouring municipality). 

At a meeting last week Gore Bay council reviewed a letter that had been forwarded to the town from legal counsel for Gordon/Barrie Island. Mayor Dan Osborne said that the town will be sitting down at the table with Gordon/Barrie Island (GBI) representatives to discuss and come up with a new agreement.

In the letter to the town of Gore Bay, lawyer Stephen Watt (for Gordon/Barrie Island) informed Gore Bay council, “your letter of November 15, 2021, with attachments, addressed to the council for Gordon/Barrie Island has been provided for my review, in (my) capacity as the municipal lawyer for the township.”

“The attached 2008 agreement, unfortunately, contains no termination clause between the two municipalities,” wrote Mr.Watt. “However, as your correspondence indicates, Gordon/Barrie Island council passed a resolution in 2020 increasing the taxation rate for the water treatment facility in contravention of the terms of the 2008 agreement.”

“Council requested that I review this 2008 agreement with a view to its termination,” wrote Mr. Watt. “Based on my review of this mater and response to council, I am now instructed to advise that GBI will terminate the 2008 agreement with Gore Bay on the following basis: GBI will be terminating this agreement with Gore Bay effective January 1, 2023. The agreement will be honoured by GBI until the end of the 2022 tax year. The 2020 and 2021 refunds requested in your November 15, 2021; correspondence will be provided in full by GBI. The 2008 agreement will apply to the 2022 tax year, as well.”

“My review of the case law and commentary indicates that, in the absence of an express termination clause, a party may unilaterally cancel a contract provided reasonable notice is given. We are of the view that in this circumstance, one year’s notice fully satisfies this obligation,” added Mr. Watt.