Red Deer County gravel companies will see a steep increase in a levy they pay to compensate for road wear.
County councillors did not agree Tuesday on whether the community aggregate levy should be boosted to 40 cents per tonne from 25 cents per tonne. It would be the first increase in the levy since 2012.
Coun. Richard Lorenz said the time was not right to increase the levy because gravel companies are still feeling the effects of a recession.
“I heard from my gravel people and they are not happy with the increase,” said Lorenz.
One company told him that its payroll had been cut to five employees from 22. Others said business had dropped 60 per cent in recent years.
Gravel companies will already be paying more this year in taxes because the county approved a tax rate increase for non-residential ratepayers on Tuesday, said Lorenz.
“I feel that this is not the appropriate time to be upping the tax on gravel.”
Lorenz said the carbon tax is also hitting gravel companies, with one owner telling him it would add $46,000 to his annual bills. Gravel companies also pay for dust control.
The higher levy would generate about $270,000 a year for the county, up from $100,000 at the existing 25-cent-per-tonne rate. Red Deer County uses those funds to repair and maintain roads.
Coun. Philip Massier also could not support a 15-cent-per-tonne increase in a year where business taxes are already on the way up.
“To hit a guy twice in the same year rubs me the wrong way.”
A compromise proposed by Connie Huelsman to raise the levy to 30 cents from 25 cents was defeated with Massier voting in favour but the rest of council against. Coun. Jean Bota was absent.
Mayor Jim Wood defended the increase, pointing out that it is passed on to customers and not swallowed by gravel producers.
“I do not believe the small increase will stop the consumer from buying the gravel,” he said.
As well, much of the gravel sold by companies is exempt. Gravel taken from pits owned or leased by a municipality or the province for their projects is exempt.
As well, much of the gravel mined in Red Deer County and hauled down its roads is destined for projects in another municipality, said the mayor.
Wood said the money raised through the gravel levy does not cover the amount of repair and maintenance work the county must do on haul routes, which also includes damage from oil and gas trucks.
Coun. Dana Depalme agreed that grave buyers will ultimately pay the increased levy cost.
“I really don’t feel this is going to affect the gravel businesses’ bottom line.”
Council voted 4-2 in favour of the increase with Massier and Lorenz opposed.