However if this is the reason that Council uses not to adjust the business license fee to at least the Provincial Annual Level of $15,000 for the Class B Casino (less than 500 slots) and perhaps a per person fee for employees, then it would bring into question the validity of the amount charged under the Terasen Gas franchise fee.
Section 194 (4) of the Community Charter requires a municipality to make available to the public, on request, the basis for calculation of a fee. (Hopefully my request for a justification of the franchise fee charged to natural gas users imposed by the city and collected by Terasen Gas on their behalf will now be forthcoming?)
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Some of the History of BC Gas (Terasen) Franchise Fee Follows:
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REGULAR MEETING OF COUNCIL, MONDAY, JULY 8TH, 2002
Mayor Harvey stated the delegation’s concern with a “tax on a tax”. Manager, Finance Fehrmann advised that he would explore the G.S.T. portion of the fee, and pointed out that he was working with the U.B.C.M. to restructure this charge.
Councillor Cochrane suggested collecting this charge through general taxation. Mr. Fehrmann agreed that this would eliminate the G.S.T. problem. He added that a number of possibilities are being explored through the U.B.C.M. and by next year, something should be finalized with BC Gas and U.B.C.M.
REGULAR OPEN MEETING OF COUNCIL HELD TUESDAY, OCTOBER 10, 2006
TERASEN GAS Councillor Beardsell noted his concerns regarding the fact that local Terasen Gas customers have been asked to sign up for a fixed rate commodity fee via a mailout brochure. The information provided in the brochure shows a sample billing form which doesn’t indicate a franchise fee on bill. Councillor Beardsell suggested that it is time to ask why is Terasen Gas is not levying a ‘franchise fee’ to customers the lower mainland when the Okanagan is being charged this fee.
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HISTORY OF THIS FEE (reposting of a 2005 article with franchise fee revenue amounts updated.)
In 1957, BC Gas (known at the time as Inland Natural Gas) was afforded the exclusive right through a Franchise Agreement to establish a natural gas distribution system within the City of Vernon. Access to road rights-of-way was extended through the Agreement to allow for the construction of system infrastructure. In exchange for these privileges, BC Gas was required to pay an annual franchise fee to the City at an amount equal to 3% of natural gas sales within the municipality.The Agreement signed in 1957 has been renewed once and extended several times under its original terms and conditions. This represents a tax to you that is given to your local municipality and in my case the CITY of VERNON. You will not see any such fee on your telephone, hydro or even your cable bills. Only people who use BC Gas are taxed by the City of Vernon for their heating bill. Last year the city collected $570,000 and this year expects to collect $579,000.The City maintains that this is the cost of road repairs etc caused by BC Gas. They admit that they have never done a cost analysis of the actual cost but they have said that the revenue definitely exceeds the costs of repairs.
3.09% BC GAS FRANCHISE FEE (Plus GST NOT Calculated)
2000 $290,331
2001 $398,823
2002 $501,972
2003 $472,388
2004 $487,013
2005 $492,625
2006 $550,000
2007 $570,000
2008 $570,000 Est (Actual will be $579,000)
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