A councillor in Espanola says the town is facing a $4 million problem.
Stewart Meikleham said a ruling from Municipal Property Assessment Corporation has re-assessed Domtar's property at $9.9 million, instead of the previous $26 million.
The town has been told by MPAC it has 90 days to pay the paper mill $4 million in back taxes.
Meikleham said a meeting would be held Wednesday night to inform the community about the situation.
"When you have a budget of about $8 million — and you have a $4 million hit — it's very difficult to have a plan moving forward," he said.
"We do have some reserves. We don't have $4 million in reserves. We are seeking government help."
Meikleham said the reduction in the assessment for Domtar means the town will receive $1.2 million less in taxes each year from the company.
He added the town has already met with its area MPP for assistance and advice.