CORRECTION: A previous story incorrectly stated how much the change would bring down taxes. The increase to the natural gas franchise fee will bring the taxes down by 0.5 per cent.
The franchise fee the City of St. Albert collects on utility bills could go up next year.
Coun. Mike Killick suggested the current rate of 20.3 per cent be increased to 25 per cent, effective Jan. 1, 2025. The hike would represent about $2 per month per user address, according to a backgrounder provided to councillors, Mayor Cathy Heron said.
It would generate $750,000 for the city that could be used to bring down taxes by 0.5 per cent, and would still be less than what other municipalities in the region are charging. Edmonton, Red Deer and Spruce Grove each charge 35 per cent, for example.
St. Albert city councillors voted a number of things through unanimously at their regular Oct. 1 meeting. This item was not one of them.
Coun. Ken MacKay objected to the arbitrary choice of 25 per cent as a new rate, and wished for some research to justify the increase. But Mayor Cathy Heron said in all her years on council the increases always seem to be arbitrary.
A city staffer noted the current 20.3 per cent rate was arrived at through number crunching done after the province reduced delivery rates in a manner that would have cost the municipality money, so they nosed the franchise fee up to compensate.
Coun. Natalie Joly said the number is arbitrary but it’s a place to start. She favours transferring the burden from taxpayers to utility users because the gas bills capture buildings that don’t pay taxes, like those owned by the provincial government. Coun. Wes Brodhead agreed 25 per cent was a starting point.
“Grants in lieu of taxes have been slashed in the last few years,” Joly said. “We have to protect taxpayers and this is one of the (few) levers we have to impact revenues.”
Coun. Sheena Hughes said an increase to the rate of about one-quarter is significant.
“It’s not noble, it’s simply a way to make our taxes look lower, and they’re not,” she said. “The reality is our taxes are higher than the region’s and it’s not because the franchise fee is higher, it’s because our taxes are higher than the regions.
“Pretending this is somehow going to level the playing field is deluding ourselves.”
Mayor Cathy Heron disagreed with Hughes, saying the franchise fee is clearly identified on utility bills and is regulated in public. She agreed with Joly the fee is a tool the city has to push back when its “hands are tied” so often and the province keeps downloading costs.
“This is not a hidden tax in any way, shape or form,” she said. “This is definitely not increasing the burden on the residents of St. Albert. There was a report years ago saying if you increase the franchise fee, the offset in taxes is greater than what you pay on your utility bill.”
Council voted the bylaw authorizing a new 10-year franchise agreement with ATCO effective Jan. 1, 2025, through first reading 4-3, with Couns. Shelley Biermanski, MacKay and Hughes opposed.
