North Bay City Council unanimously approved the financial particulars of an agreement between the City of North Bay and Enbridge Gas Inc. (EGI) to expand natural gas services to Peninsula and Northshore Roads.
With its approval during Tuesday's regular meeting, the City will make a non-refundable financial contribution to EGI for the project, as agreed upon in 2017, in an "amount equivalent to the property tax that would be recovered on the new natural gas infrastructure for a period of 10 years as per the natural gas grant program requirements."
Annual installments totalling $170,650 over 10 years (or $17,065 per year) will be paid to EGI under the agreement, beginning this year and running until 2030.
See related story: North Bay to see Natural Gas expansion
Deputy Mayor Tanya Vrebosch, who chairs Council's general government committee observed the move was a housekeeping matter to formalize the resolution Council passed in June 2017 with a by-law.
"For the next 10 years," explained Vrebosch during the meeting, "they will pay us taxes, we will reimburse the taxes as a payment [to Enbridge] and, after 10 years, we will start receiving benefits from those taxes on the infrastructure from Enbridge."
The City's finance department reports the annual contribution to EGI is fixed with the signing of the agreement. The estimated property taxes have been calculated using 2016 base year assessment values and 2020 pipeline and commercial tax rates.
Added Vrebosch, "It's a local improvement that will not only help the economy by getting natural gas out to rural communities but it's also going to start giving us revenues that we wouldn't have seen had Enbridge not installed the infrastructure."
The Northshore and Peninsula Roads Expansion Project is underway and involves the construction of 27 kilometres of new natural gas pipeline by Enbridge. The company anticipates the project will be completed in early fall 2021 after the installation of pipeline along Northshore Road, Garland Road, and the end of Peninsula Road.
The project is being funded through the province's Natural Gas Expansion Program, which encourages communities to partner with gas distributors on potential expansion projects that would not be built without additional financial support. This program's aim is to deliver natural gas to an estimated 134 local homes and businesses.
