Teck wants to reduce its share of the City of Trail’s property taxes.
In a presentation to council this week, Trail operations general manager Matt Parrilla noted the company pays 60 per cent of the city’s total municipal taxes, which he said is the highest percentage of any community in BC.
He said to support the company’s long-term viability, Teck is seeking to gradually reduce its share of municipal tax to 50 per cent over the next 10 years.
“We are very well aware of fiscal responsibility to the city,” Parrilla said. “We want to continue to be a good corporate citizen and member of this community. And that’s why we believe in doing this gradually over the longer period versus one short shock to the system.”
Parrilla said 2025 was a much better year for the company than in the recent past. The company reported a gross profit of $281 million in Trail last year, compared to a $66 million loss in 2024. He said the local operation was profitable because of its ability to treat stockpiled feed supply on the property and not having to buy any.
However, he said that isn’t a sustainable long-term strategy and at some point all the material will be used up. He said the global market “continues to be tight” with a “scarcity of mine supply concentrates” and increasing smelting capacity in China as well as in North America, following Korea Zinc’s announcement at the end of last year that it will buy and expand a smelter in Tennessee.
The amount smelters charge miners for treating their materials is at a record low, Parrilla said, and it’s expected to remain that way for the foreseeable future. On the flip side, Teck has been able to take advantage of record high prices for products like germanium and silver.
But Parrilla said while metal prices are cyclical, the company has “one of the highest cost structures in the industry, and that is very, very real.”
In late 2024, the company laid off 38 employees at the Trail operation. Parrilla said they have also “substantially reduced” spending on contractors and consultants and made changes to their supply chain. The local smelter deliberately did not run at full capacity last year, he added. Overall refined zinc production was about 230,000 tonnes, but the smelter is capable of producing 300,000 tonnes per year.
As part of Teck’s merger with Anglo American, the company said there is an opportunity to “significantly increase germanium and other specialty critical minerals production” in Trail. Teck said it would invest up to $750 million in the Trail operation and explore adding copper processing. Parrilla said gallium is another potential product to be added.
Parrilla said the smelter is a “very high fixed cost organization,” between electricity, labour, and transportation. While the smelter originally took advantage of its proximity to the Rossland mines, today most of the ore it receives comes from long distances. Parrilla said the cost of bringing materials in and out isn’t competitive compared to other smelters.
Parrilla said he prefers not to focus on labour costs, because “that’s a piece of being effective. We enjoy the fact we’re a western producer. We’re happy to provide good paying jobs and to benefit from the society we live in, in comparison to some of the places in the world where this business is.”
Parrilla also said Teck is talking to all levels of government about its operating costs, not just the city, and said the company supports paying “a reasonable and responsible share of municipal tax. We remain deeply committed to being a good neighbour a stable employer and a strong community partner.”
$2 million shift
The city and Teck have already been discussing shifting the overall tax burden from industry. City manager Colin McClure told council it could lower the city’s reliance on Teck, but implementing such a move would be complex and could be a hard sell to businesses and residents who would be expected to pick up more of the burden.
He provided some numbers illustrating the present situation. The city’s current tax revenue breakdown is as follows:
• Industrial: $10.9 million (61 per cent)
• Residential: $4.76 million (26.7 per cent)
• Commercial: $1.37 million (7.7 per cent)
• Utilities: $806,000 (4.5 per cent)
An average home in Trail valued at about $406,210 pays $1,148 in annual property tax to the city, while a commercial property valued at $1 million pays $6,839.
Under the scenario Teck is proposing, $1.93 million in tax presently collected would be added to commercial and residential properties, a 36 per cent increase, although spread over 10 years. The average home would then pay $1,568 (an increase of $420) and the average commercial property $9,341 (an increase of $2,503). Utilities are already taxed at the maximum rate.
‘Part of the DNA of Trail’
Councillors were largely sympathetic to Teck’s request, although they anticipated concerns.
Councillor Nick Cashol said the request is “reasonable for council to consider as part of our broader tax strategy discussions” and added that the smelter has “been part of the DNA of Trail” for 130 years.
“Generations of families have built their livelihood around this relationship,” Cashol said. “Because of that long history, I believe it’s important we approach these conversations with respect for that relationship while also ensuring we are building a fair and sustainable tax structure for the future.”
He said there “will be resistance, no question,” but he felt it makes sense in principle. “If this is done on the foundation of fairness, full transparency, and is something council gets behinds, part of our job is to sell it.”
Councillor Thea Hanson said the city needs to look at other opportunities to add revenue and to provide incentives for increasing and diversifying its tax base. “What are we doing to make up that difference?” she asked. “We can’t keep asking people for more and more and more. If this [tax income] is offset here, where are we making it up?”
Councillor Paul Butler wondered if the discussion around Teck’s tax bill would open the door to other businesses seeking relief. He added that he wanted to ensure the company is having similar discussions with the regional district.
Councillor Bev Benson noted that in addition to the amount the company pays in taxes, it provides funding to many community groups each year.
Richard Deane, the local manager of commercial services and public affairs, said Teck’s total contribution would be in the “hundreds of thousands” of dollars, consisting of both ongoing annual support to a number of organizations, as well as larger one-off donations for things like the Riverfront Centre and hospital campaigns.
Councillor Terry Martin, who sits on the city’s major industrial taxation committee, said he appreciated “how professional and respectful” the company has been during their conversations.
Council has made no decisions on the company’s request.
Looming over the discussion is Teck’s outstanding appeal of its property assessments for 2019-22, which awaits a Supreme Court decision.
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