Enerdu pays no property taxes, “in-lieu” payment likely to be cut

Enerdu

Since 2001, Enerdu and other hydro plants around the province have not paid property taxes to the the towns and cities where they reside — instead, under the terms of Ontario’s “Power Dam Special Payment Program”, the municipalities receive an annual “payment-in-lieu” of those revenues.

According to Town staff, our share from that program totalled $11,700 for each of the past three years. But that’s likely to drop in future.

Buried deep in the recent provincial budget was this item:

The Province provides a special annual payment to municipalities hosting hydro-electric generating stations (power dams). Through this program, the Province has been providing municipalities with funding that reflects the amount of property tax revenue that each municipality received from these stations prior to 2001, when the stations became exempt from property taxation.

In 2013, the Province advised municipalities that this program would be reviewed as part of a broader examination to ensure government programs meet their policy objectives, while taking into account the government’s ongoing effort to make responsible spending choices…

As a result of the Province’s review, and in the context of the government’s commitment to continue to manage spending, the program will be phasing down to $14.3 million by 2017.

This means a $4.4 million cut to those payments province-wide, and apparently a corresponding drop in our share. Not that $11,700 is a major contribution to the Town’s operating and capital budget of $14.8 million — but any cut will be one less argument in favour of Enerdu’s alleged benefits to the community.

Some Ontario communities will be much harder hit by this claw-back of funding. The town of Wawa, with seven hydro plants running inside its boundaries, will lose almost a million dollars over the next four years, a devastating blow to a town already hard-hit by severe floods in 2012 and the loss of two major employers in prior years.

Wawa’s council has asked municipalities across Ontario to join it in passing motions calling on the government to reverse its decision to decrease funding to the Power Dam Special Payment Program. Our Council will be asked to approve such a motion at its meeting on September 2.