Municipalities push for bigger royalties

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Published on Friday, 12 April 2013 15:48

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Municipalities say they need bigger royalties from aggregate dug out of the ground and hauled out of their territories because the money they get now is far less than the cost to taxpayers of serving the industry.

Getting the province to hike the current 7.5 cents per tonne royalty paid to municipalities on royalties from aggregate products is one of the chief objectives of the lobby group Top Aggregate Producing Municipalities of Ontario.

"The situation isn't fair because we have no control over anything," says Brant County Mayor Ron Eddy, a member of a group of municipalities lobbying for changes.

"The government gets to issue licences to companies for pits and quarries and it gets to state in its regulations what kinds of trucks are to be used, and what they can carry, and issue the licences. And the government decides the standards of the roads we have to build and maintain to carry those trucks.

"The royalty we get isn't enough even to cover the cost of the roads, and that's only one of a bunch of expenses we have due to the number pits around the county."

The per-tonne royalty is paid by pit and quarry owners to the Ontario Aggregate Resources Corp., which forwards a percentage to the municipalities and other organizations.

The rate has been a bugaboo with aggregate-producing municipalities for some time. It stood at four cents a tonne for years, with 3.5 cents going to the lower level and 0.5 cents to the upper level in the case of two-tiered counties and regions. Because Brant is a single-tier municipality, it got the whole four cents.

The rate was increased in 2007 to 7.5 cents per tonne, with six cents going to the lower tier municipalities and 1.5 cents to the upper level. Brant gets the 7.5 cents.

The county recently got a cheque in the mail for $130,065.95 for 2012. Compared to Brant's roads costs last year, it's a "pittance," says Eddy.

TAPMO has been around for a few years, and was originally called the Top 10 Aggregate Producing Municipalities of Ontario.

The organization's stated purpose is to work in "partnership" with companies and other stakeholders to build a responsible, sustainable industry that also works for host municipalities.

Their complaint is that the lion's share of the province's aggregate is produced in their municipalities and they have to shoulder big infrastructure costs while the products go to other centres.

Its members - mostly rural or cities with rural hinterlands - originally included: the City of Ottawa, the City of Hamilton, Municipality of Clarington, Town of Milton, City of Kawartha Lakes, North Dumfries Township, Uxbridge Township, Zorra Township, Caledon and Puslinch Township.

But more municipalities - including Brant -- joined over the past year with the sudden appearance of some controversial applications for licences - particularly a later withdrawn one from The Highland Companies to open a mega-quarry in Melancthon Township in Dufferin County.

It would have served primarily the Greater Toronto Area market to the south but would have seriously affected several rural and small-town municipalities.

Brant's interest in joining TAPMO was piqued partly by an announcement that Dufferin Aggregates intends to go ahead with a 39-year-old licence to open a pit on Watts Pond Road north of Paris.

If it goes ahead, the new pit would force the county to spend millions upgrading roads along designated routes that would take an estimated 150 trucks making 300 trips per day.

Dufferin has committed to paying the cost of upgrading Watts Pond Road from the pit entrance roadway to Pinehurst Road. The county is on the hook for the rest.

The county is still negotiating with Dufferin on the details and costs of the routes. Meanwhile, council has earmarked $2 million in the roads capital budget to get ready.

"Local roads don't have the base needed to support the heavy trucks," said Eddy.

"Our taxpayers will have to pay a huge cost."

By Michael-Allan Marion

Published in the Brantford Expositor, Apr. 11, 2013

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