FACING a likely bump in costs for its Lonsdale Energy Corporation, the City of North Vancouver is hoping the province will tweak its tax code before reinstating the provincial sales tax in the spring.
Under the old PST, the LEC had to pay tax on the natural gas it purchased for heating the homes and commercial spaces connected to the system, whereas the electricity used for less efficient baseboard heaters and natural gas purchased directly by customers was exempt. When the HST was introduced in July 2010, LEC passed along the savings to its customers.
But that is likely to come to an end on April 1 when the PST comes back into effect, according to the city. The higher costs will leave building owners with less motivation to ditch old boilers and connect to the LEC system, according to a city resolution passed Monday night.
The total increase on customers' bills will be between 3.5 to five per cent, based on commodity prices.
Council voted Monday night to lobby the province and recruit the support of other municipalities that run district energy systems to the cause.
Specifically, the city is hoping for an exemption for PST charges on natural gas purchased for the purpose of generating energy for resale, as well as the machinery used to run a district energy utility.
Council is arguing that it will be counterproductive to the province's goals of reducing energy consumption and greenhouse gas emissions by encouraging the use of less efficient standalone gas boilers, which are subject to less tax.
The LEC heats about 2,100 residential units in 31 buildings as well as dozens of commercial and community spaces including the city library and city hall.
