BC Hydro Fair Compensation

Year
2011
Category
Taxation
NCLGA Ref#
B11
UBCM Ref#
C13/B23

Status

Endorsed by the NCLGA and UBCM Memberships

Details

WHEREAS Crown Corporations are expected to pay their fair share of property taxes by providing a grant-in-lieu;

AND WHEREAS private utilities pay property taxes to municipalities and regional districts on property including rights-of-way for distribution and transmission lines, and private utilities and BC Hydro provide municipalities a 1% tax on gross sales revenues within their jurisdiction:

THEREFORE BE IT RESOLVED that NCLGA and UBCM lobby the Province of BC to explore the taxation of BC Hydro and implement a fair and equitable method of compensation to all local governments.

Additional Information

UBCM Comments:

The UBCM Membership has consistently endorsed resolutions relating to Crown Corporation assets and the payment of either grants in lieu of property taxes, or full property taxes based on assessed property values (2009-B44; 2005-B96; 2001-B21; 2001-B24; 1995-A6). Further, UBCM General Policy 1.8 states that “property taxation distribution…should be based on actual value assessments and grants in lieu of taxes paid by other governments and their agencies should be paid on the same basis as the ordinary taxpayer.”

In response to resolution 2001-B21, the BC Ministry of Finance stated that “[s]ome provincial investments are so massive that full grants would be out of all proportion to the services that communities provide these Crown investments and would completely distort the tax bases of these communities by comparison with other communities. The BC Hydro dams on the Columbia and Peace rivers are examples of such massive investments.”

The Provincial Government in 2009 indicated that it had reviewed its grants-in-lieu policy and made a decision to create a more transparent policy rationale for calculating the grants for generating facilities to provide additional funds to communities which host and/or are impacted by power generating facilities, and for adjusting these grants into the future and to enhance payments already made to regional districts. The Province also indicated that it had decided not to provide additional grants on other provincial facilities in Regional Districts.

Under the Community Charter s.220(1)(a), Crown Corporations are exempt from paying property taxes.

 

Actions: This resolution was listed as C13, and referred to resolution B23 in the UBCM Annual Report book.