Gas Distribution System Municipal Taxation Act Introduced

SERVICE N.S./MUNICIPAL RELATIONS--Gas Distribution System Municipal Taxation Act Introduced

Municipal taxation of natural gas distribution systems in Nova Scotia will be based on a combination of assessment and revenues, rather than just assessed property value. This was the highlight of four bills introduced in the legislature today, Sept. 24, by Service Nova Scotia and Municipal Relations Minister Barry Barnet.

The Gas Distribution System Municipal Taxation Act was introduced at the request of the Union of Nova Scotia Municipalities (UNSM). The UNSM negotiated a 20-year tax arrangement with Heritage Gas on behalf of all municipalities containing the company's pipelines.

"Normally, municipal taxes are determined by the simple equation of rate times assessment," Mr. Barnet said. "But municipalities wanted to try something different with this new industry. Since it's their revenue at stake, we agreed they should negotiate directly with Heritage Gas."

The revenue-based arrangement covers low-pressure lines which will serve mostly residential and commercial customers, and single high-pressure lines that serve one industrial customer. For the first 10 years, taxes on the low-pressure line will be two per cent of gross revenues, four per cent for the next five years and five per cent for the remaining five years of the term. Taxes on the high-pressure, single-customer lines will be eight per cent of gross revenues.

The minister said the municipalities realize they may receive smaller revenues in the early years of the arrangement in anticipation of greater revenues later on.

"Natural gas development and all that comes with it is new territory for Nova Scotia. It requires us to think differently and to be willing to try new things," he said. "I commend the municipalities for this innovative approach to taxation. Taxation certainty will help develop the industry and sends a positive message about Nova Scotia as a place to do business."

Other bills introduced today will amend the Municipal Government, Land Registration, and Vital Statistic acts. The amendments to the Municipal Government Act include housekeeping matters and items at the request of municipalities.

Since 2001, the Land Registration Act has provided the framework for Nova Scotia's new land registration system. The electronic system replaces a 250-year-old paper-based system and guarantees property title. The system is now in place in eight counties and will be rolled out to the rest of the province by March 2005.

"As with any new legislation that has been in place for a while, we have identified ways to improve the Land Registration Act," Mr. Barnet said. "These amendments will help to streamline the new system and make conversion of land parcels to the system easier."

In particular, changes to the mortgage conversion trigger will permit owners to mortgage their property before they register their parcel allowing landowners to receive mortgage money faster.

The proposed amendment would give lenders a specified time after the mortgage is funded to convert the parcel. The mortgage will be void if parcel conversion does not follow mortgaging within the time frame to be specified in regulations.

Another clause would give the minister flexibility to provide a landowner with more time to convert parcels to the new system where circumstances require. This would benefit the registry when large land holders need to convert many parcels at one time, thereby avoiding the need for other property owners to wait to have their parcels converted.

The Vital Statistics Act is proposed for amendment in response to a 2003 Supreme Court of Canada ruling on the rights of biological fathers. The amendment will allow for courts to order that paternity be determined through genetic testing, and make it easier for paternal information to be included in birth registration records. The Supreme Court ruling was related to British Columbia legislation, parts of which are similar to the Nova Scotia act. Most provinces are amending their relevant legislation to comply with the court ruling.