WHEREAS municipalities provide critical services such as policing, fire protection, roads, water, sewer, garbage and recycling, parks and recreation services and consistently receive demands for increased service; AND WHEREAS section 353 of the Local Government Act was intended to require utility companies to pay the tax rate on all revenues generated within the municipality: THEREFORE BE IT RESOLVED that the provincial government be requested to pass legislation enabling municipalities or regional districts to levy a tax of up to 5 on the gross operating revenues earned by a utility from all sources of their operation within the municipality or regional district.
Ministry of Community Development Under Section 353 of the Local Government Act, within municipalities, utility companies pay a tax of 1 of revenues received from customers within the municipality in lieu of a property value tax on certain specified improvements such as telephone lines, cable, pipe lines, poles, and transformers, used solely within the municipality for local generation and distribution. The Ministry of Community Development has studied proposals to increase the 1 tax on the revenues derived by utility companies within municipal boundaries, and determined that amending the legislation to increase the tax is not appropriate. Municipalities have benefited significantly over the years from increasing revenues collected under Section 353 of the Local Government Act as markets expanded and prices increased. A tax increase beyond 1 of utility revenues has the effect of imposing a tax on utility customers in lieu of the property tax that would be imposed on the utility itself. We would thus be taxing utility users on the basis of the property owned by another. The proposed tax of up to 5 is equivalent to a commodity-specific sales tax on utilities, in addition to the provincial and federal sales taxes. In unincorporated areas, BC Hydro makes annual grants based on 1 of revenues received, payable to the Surveyor of Taxes pursuant to Order-in-council no. 1218, 1968. Other utility companies pay property value taxes on the specified improvements. Such improvements are taxed as Class 2 Utilities properties which are subject to the highest provincial class multiple.