“Let’s not start playing a shell game over revenue the city requires.”
Paul Lacroix – Pro-Western Plastics
Here we go again. It seems that city administration has to bring the issue of a franchise fee on municipal utilities forward at least every ten years. The issue is always that this is a way to reduce municipal taxes. This time around they are even proposing a ‘revenue neutral’ franchise fee that will reduce civic taxes by 3.27 per cent (based on a 10 per cent franchisee fee) but of course shifting a similar fee onto your electrical bill. ‘Revenue neutral’ is an oxymoron and is just a means of shifting consumer costs from the municipal tax bill to the FortisAlberta electrical utility bill.
The philosophy behind the move is supposedly to force entities such as schools, churches, non-profits and provincial properties that are otherwise exempt from municipal taxation to pay extra on their utility costs. The downside however is that businesses, both small and large who use a lot of electricity or natural gas have to contend with an exorbitant increase in their utility fees.
To make the transfer more palatable it has been suggested that the franchise fee be phased in over a period of several years. Again, more smoke and mirrors. It won’t be long before it is 18.8 per cent same as for Direct Energy.
The argument is that utility companies should be paying ‘rent’ for their use of municipal rights-of-way. But municipal roadways and rights-of-way are public property, which are designed to accommodate the services we need. Could a municipality survive without electricity and gas? – No, electricity and natural gas are just as necessary as roads, sewer and water.
The big problem however is that the municipal savings are just passed on to the utility company, which turns around and adds it to your utility bill and of course they have to add the standard 5% GST plus it increases their administrative costs that the consumer has to pay for. So it is really a ‘shell game’ that municipalities play to make it look like their property tax is kept low but of course the utility company becomes the bad guy.
And again watch out for a proposed new utility corporation. A franchise fee could be charged to it a few years down the road if it becomes an arms-length corporation. That’s just another way to move municipal costs onto your utility bill, plus GST of course.
Councilor Brodhead claims that it is “important for the City to use all revenue streams it can.” The root problem is that the City of St. Albert does not have a revenue problem, they have a spending problem!
Ken Allred is a former St. Albert alderman and MLA.
