County investigates business licence only for energy companies
With the “whack the frac” idea off the table, Mountain View County administration is looking at recovering damaged road costs associated with energy company activity through a sector-specific business licence.
Currently, Mountain View County does not licence any business operating within the municipality.
“This would be the first,” said Jeff Holmes, the county’s director of legislative, community and agricultural services.
Last August, then-Reeve Paddy Munro suggested “whacking” hydraulic fracturing projects with a $25,000 tax on each well to pay for damage to county infrastructure caused by the industry.
Holmes said the impacts are mainly on county roads and include everything from creation of washboard to mud left on the road.
Several options to recoup costs were identified in a report given to council last year, including a special tax on fracking operations. Most did not comply with the Municipal Government Act, would impact other businesses in the county, or would have to replace options already being used.
Implementing a business licence specific to the industry was not ruled out, said Holmes.
A number of law students have been working at establishing the feasibility of an energy business licence for the county since February, when $16,500 was approved in the interim budget for research and legal fees pertaining to the draft bylaw.
“They’ll come back with an opinion on what we can and cannot do,” Holmes said.
Business licensing of any class of business can only be implemented to recover direct costs that the municipality bears that are associated with that specific class of business, according to the Municipal Government Act.
The first step required to initiate a business licence would be to generate a comprehensive report detailing the municipal costs created by energy companies, council was informed through a project sheet up for discussion during 2012 budget deliberations.
The costs would then be the base line for establishing business licence fees.
“At this point we have no idea what the appropriate dollar amount would be,” said Holmes.
Council is looking for additional ways to recoup costs then are already available, said Holmes.
Last year, companies paid between $800,000 and $900,000 to Mountain View County through a provincially set well drilling and equipment tax.
Approximately $500,000 is budgeted to be brought in through the tax this year.
“Council was clear, it’s not a replacement for the well drilling tax, it’s in addition to,” Holmes said.
In place for many years, the special tax - which is calculated on a per metre basis to the bottom depth of each well - was due to expire but the provincial government has extended it by one more year, said Holmes.
The county also collects linear taxes from energy companies and fees for new approaches and road inspections.
The county can also draw on the letter of credit that energy companies are required to put up, guaranteeing roads will be repaired during exploration.
Holmes said there are no set timelines for the new business licence initiative, other than “as soon as possible. It was identified by council as a priority.”
He said he expects to be able to present the law students’ opinion on the matter to the county’s policies and priorities committee by the end of April or early May.