Gas and Electricity Tax
As per Sections 441 - 450 of The City of Winnipeg Charter The City of Winnipeg is given the authority to adopt a by-law to impose a tax on the consumption of electricity and natural gas for non heating purposes within the city limits. The tax is to be calculated, collected and remitted by the seller. The tax collected is treated as general revenue and, along with Property Taxes, is used to pay for the various services provided by the City of Winnipeg to the residents.
The calculation is dependant on the primary heating source of the consumer. Two rates are used for the calculation 2.5% for domestic purposes and 5% for other than domestic purposes. A number of different scenarios are possible particularly for businesses but below are the two most common for domestic consumption.
- If natural gas is the primary source of heat then an average monthly consumption is calculated for the months of June, July and August (called base load). The tax is calculated at 2.5% X the lesser of the base load or actual consumption. The tax on the electricity would then be 2.5% X the total consumption.
- If electricity is the primary source of heat then it is assumed that 80% of the electricity consumption is for the purpose of heating. The tax would be calculated as 2.5% X 20% X the total consumption. If there was also gas (rarely there is in this scenario) the tax on the gas would be 2.5% X the total consumption.
As per Section 443(3) of The City of Winnipeg Charter, the rounding rules are that any fraction of a cent is to be computed as a whole cent.
There is also a provision, particularly for businesses that purchase natural gas from a broker, that a portion of the tax is refundable when the broker’s price is lower than the price charged by Manitoba Hydro.
Search By-laws for: Gas and Electricity Tax By-law No. 479/73.
Search By-laws for: Refund of Excess Gas Tax By-law No. 6490/94.