Smiths Falls to write off $153,000 in tax from failed factory

G.H.Metal
Image from Google Street View
Posted on: November 14, 2017

Chris Must

The loss of a small Smiths Falls factory with a history dating back to 1946 is costing the town $153,000 in unpaid commercial property taxes.

G.H. Metal Stamping, named for owner Gord Hicks, ceased its production of toolboxes in October of 2015. Town Clerk Kerry Costello advised Smiths Falls councillors at a meeting Nov. 13 that taxes on the Lorne Street property were being paid up until the end of 2013 by the federal Business Development Bank (BDC).

“It’s not a good story,” said Costello, adding that the town granted a tax extension to G.H. Metal Stamping in 2013, but received only one payment from the owner February of 2014, and a second payment from the BDC two months later.

The town registered a tax arrears certificate against the property at the beginning of 2016 only to discover that the crown had registered liens against the property as well. A crown lien, explained Costello, takes precedence over a municipal lien.

Through negotiations with Ernst & Young Inc., court-appointed receiver for the property owner, the town will receive 10 per cent of the net proceeds of its sale – amounting to $34,696.

The amount of outstanding taxes on the property as of Oct. 24, 2017 is $212,000, said Costello. The town’s share of the taxes, which must be written off, comes to $153,000.

“We are accepting the best deal we can get from the business failure,” said Costello.

“We negotiated, probably, the best of a bad situation,” commented town Chief Administrative Officer Malcolm Morris, adding that the BDC “could have taken more and left us with nothing.”

The company, which became G.H. Metal Stamping, was founded in 1946 as part of Beach Industries. Its owner acquired the tool box production division in 1992 and operated for another 23 years before shutting down production on Oct. 26, 2015.

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