The hidden tax-“Franchise Fees”

Most residents in most municipalities do not even know about the hidden tax known as “Franchise Fees” in fact some municipalities even go to the ridiculous extreme of trying to claim it is not a tax. The quote below was copied from one of these municipalities. Thanks to an awareness created within our municipality over the last two years, the residents of the Crowsnest Pass are not fooled by this sly trick. This “Fee” as become an alternate revenue source used by politicians to create an illusion that taxes are not being raised by a significant amount when in reality they are just taking the money out of your left pocket instead of our right one.

"Are franchise fees a tax? No. Franchise fees are simply the cost utility and cable providers incur for being allowed to place their facilities in the public's right-of-way. Franchise fees are considered a cost of doing business. Franchise fees are an important component of a diversified revenue stream for municipalities."

In 2010 the Municipality of Crowsnest Pass collected $295,551 in Franchise fees this number jumped to $374,288 in 2011, $569,749 in 2012 and was originally budgeted to go to $906,694 in 2013 until the huge out cry by the public. Which led to council having a change of heart and only increasing it to $682,000 for 2013.

2011 increased by $79,000

2012 increased by $196,000

2013 increased by $112,000

2010-2013 increased by $387,000

That is correct in total the “Franchise Fee” increased by $387,000 over those three years a whooping 130 % if these same dollars had been generated by increasing taxes, it would have required additional tax increases of 1.25% in 2011, 2.9% in 2012 and 1.75% in 2013.

Without the public out cry previously mentioned the Franchise Fee would have risen by another $225,000 in 2013 the equivalent of another 3.5% tax increase.

It would be very interesting to hear what position candidates for the upcoming election will take  on Franchise Fees, would they agree that they have gone up more than enough in the last three years? and commit to not increasing them for the next four years?    


Note: Cost of administration $4325 per day

Crowsnest Pass-Ranchlands, A different perspective on Annexation

There is no question grabbing a significant piece of Ranchlands would be a financial dream come true for the residents of the Crowsnest Pass. On the other side of the equation what would a resident or a business currently or potentially looking at locating in Ranchlands have to look forward to? 

In the Nanton News the other day the CAO for Ranchlands provided a comparison of Ranchlands Mill rates versus the surrounding Municipalities.  Keep in mind the numbers may seem low but he is just providing the Municipal portion of the mill rate, not included are the ASFF or the seniors lodge portion.

So now a resident of Ranchlands hearing about Crowsnest Pass annexing them gets to look at the following.  Let’s assume they have a property assessed at a value of  $500,000 today they are paying roughly $1650 in tax, become part of the Crowsnest Pass that number becomes $3050. Now a proponent of annexation will argue that other areas of the province that were annexed, negotiated a moratorium on tax increases or a phased in increase over any where from 5-20 year time frames that’s true. Sooner or later the new residents will get hit with the tax increase.

The area where this has a much larger impact is on the commercial side, let’s assume for a second you are going to locate a fair size business in Ranchlands, for the hell of it let’s pick a coal mine, lets say with an assessed value of $500 million. At today’s Ranchlands rate they would pay $2,528,000 a year. That same property taxed at the Cowsnest Pass rate would pay $5,385,250 a year.

A difference of $2,857,250 a year put that over a life span of 20 years it comes out to a whooping $57,145,000 those are substantial dollars. The point of all this, which tax rate do you think the owner of the coal mine will be pushing for? Plus keep in mind the people that will make the ultimate decision, the  province will get it’s share of royalties which ever municipality the mine sits in.

Willow Creek   Foothillls      CNP         Kananaskis      Ranchland    MD  Pincher Creek

Residential and Farmland                                             

3.7860              2.7979       6.1024        5.0560            3.3000           4.2738

Commercial/Linear/Machinery & Equipment               

7.4340             6.8704       10.7705      5.0560              5.3000          7.2003

Well here comes the first real tough choice! Maintaining a 0% tax increase.

Previously I have stated that it was too soon to get caught up in the excitment of a 0% tax increase.

But maybe not! has I have also stated previously Council could still maintain a 0%, by choping the budget by the equivalent amount of any increase in the ASFF.

Well now available on the municipal affairs web site is the cost of the ASFF, and once again the province is increasing the burden on the residential tax payer.

Total education requisition for 2011 $2,542,134.47 versus $2,366,565.40 last year. An increase of $175,569.07.

Three options at $65,000 equals 1% tax increase

a) Increase taxes by 2.7%
b) Decrease the budget by $175,569.07
c) Some combination of a+b.


Yes the 3.2% for last year, with putting $450,000 into reserves and $250,000 into equipment does not look so bad if they go with option A.