Peace River’s administration has been contacting municipalities across the province after being reassessed $400,000 in GST owing based largely on the wording of their intermunicipal agreement.
The Peace River intermunicipal agreement specifies that no municipality signed on to the agreement can be discriminated against. The Canada Revenue Agency interpreted a clause in the Excise Tax to mean that as a result of the nondiscrimination clause, donations of $8 million towards the new Peace River multiplex from surrounding municipalities were taxable, because they allegedly provide access to the facility. The Town of Peace River disputes this, since there is only one user rate for anyone using the facility, no matter where a user may live.
Peace River’s administration found that the Town of Olds has an intermunicipal agreement with Mountain View County with identical language to the intermunicipal agreement between Peace River and surrounding counties.
In response to emailed inquiries from the Express, administration at the Town of Olds confirms that Olds has not been audited over GST, and the same clause in their agreement has not led them to be reassessed for GST owing.
“Since receiving the information from the Town of Peace River the Town of Olds has been looking into our current agreements with Mountain View County and will be making any adjustments necessary,” wrote Sheena Linderman, Director of Finance.
“The Town of Olds interprets the clause within the Excise Tax Act the same as the Town of Peace River does/did and does not believe GST should be charged on cost sharing agreements.”
“Whether we are impacted or not we support the Town and believe that AUMA and RMA should discuss this item. At this time the Council has not discussed this item.”
At their last council meeting, Peace River town council agreed to submit a resolution to Alberta Urban Municipalities Association (AUMA) to be discussed at the AUMA fall conference. Meanwhile Northern Sunrise County council agreed to contact the Rural Municipalities of Alberta (RMA) with a resolution of their own at their last council meeting. Northern Sunrise donated $6 million towards the new Peace River recreation centre.
The Town of Mayerthorpe council has also recently discussed the issue after receiving a briefing note from Peace River. As reported by the Mayer- thorpe Freelancer, Mayerthorpe council members decided to support Peace River.
Mayor Janet Jabush said the outcome of the audit will set a precedent.
“We’ll all get bitten by it, and it will affect all of us,” Jabush said.