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Court hangs up on Nanaimo’s wireless tax

Man talking on his cellphone.

Brett Lamb/iStockphoto/Brett Lamb/iStockphoto

Nanaimo's attempt to force wireless companies to help pay for local 911 emergency service amounted to an illegal tax, a B.C. Supreme Court judge ruled Wednesday, tossing out a city bylaw and calling into question similar schemes in neighbouring districts.

The city introduced a bylaw in 2010 requiring wireless providers to either sign agreements to collect a 911 levy from their customers or pay a $30 fee for every local 911 call placed on their networks.

The bylaw was an attempt to fund local 911 service as customers shifted from land lines to mobile phones. The Canadian Radio-television and Telecommunications Commission requires landline providers to collect a 911 levy from customers, but wireless companies aren't required to do the same.

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The Canadian Wireless Telecommunications Association, Telus, Rogers and Bell Mobility challenged the bylaw, arguing the $30 fee for companies that don't voluntarily enter into levy agreements amounts to an unauthorized tax.

Mr. Justice William Ehrcke agreed, noting that under provincial legislation, cities are permitted to charge user fees but are not allowed to impose taxes.

Judge Ehrcke noted the fee meets the Supreme Court of Canada's definition of a tax, notably because the fee is mandatory and the amount isn't related to the actual cost of providing 911 service. He rejected the city's characterization of the $30 charge as a user fee.

"I find that the single-call fee is a tax that the city does not have the power to impose," Judge Ehrcke wrote in a decision posted to the court's website Wednesday.

The Cowichan Valley Regional District and the Regional District of Nanaimo, which use the same 911 centre as the city, enacted similar bylaws, though the latest judgment only directly affects the city.

The city issued a statement saying it was disappointed by the ruling. The statement notes the region's 911 service receives roughly 53,000 calls a year.

About 53 per cent of them are from wireless devices, even though neither wireless carriers nor their customers are required to pay for 911 service.

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"The city believes that, where possible, the users of a service should pay the cost of the service and not be a cost borne by the taxpayer," the statement says.

Wendy Idema, director of finance for the Regional District of Nanaimo, said the district had delayed implementing its own bylaw while the City of Nanaimo's case was before the courts.

Ms. Idema said it was too early to say how the district would respond.

"I think once we have feedback from our solicitors about what they think the process should be and their interpretation of the ruling, and once we meet with the City of Nanaimo and the Cowichan Valley Regional District to review all of that, then we'll decide," said Idema.

In the meantime, the district will continue paying for 911 service through property taxes, she said.

A spokesman for the Cowichan Valley Regional District said the district was reviewing the court's ruling.

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The judgment notes wireless companies have said they are willing to sign 911 levy agreements if those agreements are legislated by the provincial government.

New Brunswick, Nova Scotia, Prince Edward Island and Saskatchewan all have regulations requiring mobile companies to collect 911 fees from customers, but B.C. does not.

The B.C. government has said it is exploring the issue, according to the judgment.

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