WHEREAS utility costs comprise a substantial portion of the operating costs of any building, whether that building be a residential, commercial or public facility;AND WHEREAS Canadian consumers have experienced substantial increases in utility costs, particularly with respect to natural gas and electricity services, over the past two years;AND WHEREAS natural gas and electricity services are subject to the federal Goods and Services Tax, despite the reality that these services are basically essential;AND WHEREAS residential consumers do not enjoy the same opportunities as private business to reclaim any GST paid on utility bills as an input cost;AND WHEREAS municipalities also face increased operating costs due not only to higher utility costs but also due to higher GST charges based on those utility costs;AND WHEREAS the “essential service” nature of water and sewer utility billings is already recognized by the Government of Canada through the fact that these utility services are zero-rated for GST purposes;
THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties urge the Government of Canada to designate all utility services (e.g. natural gas and electricity, in addition to water and sewer services) as being either exempt or zero-rated for GST purposes;AND FURTHER BE IT RESOLVED that the AAMDC seek the support of the Federation of Canadian Municipalities and the Government of Alberta in encouraging the federal government to implement this recommendation.
Natural gas and electricity services are in all reality “essential services” for all Canadians, whether these services are delivered for residential, commercial or public institutional purposes. It is not reasonable to place an additional tax burden on consumers for the use of these “essential services”, particularly in a time of high prices for these services. Consumers across Canada have suffered greatly with increasing costs for electricity and natural gas in the past few years. The impact of these increases has been magnified by the fact that GST payable on these services also increases as the market price of the energy used increases. In essence, the Government of Canada has enjoyed a financial benefit as a result of rising energy utility costs, through significant increases in GST revenues. When the GST was created, water and sewer utility bills were zero-rated, to recognize the fact that these services were considered exempt under the old Federal Sales Tax (FST). Providing similar status to energy utility services would simply recognize the reality that these services are all “essential” to Canadian consumers, businesses, municipalities and other facility owners.
Resolution 6-01S, endorsed by delegates to the 2001 Spring Convention, calls for the elimination of GST on utility services provided to residential properties.