Court quashes Nanaimo’s 911 call levy bylaw

NANAIMO – Judge says municipality lacks authority to impose tax on wireless service providers

A Nanaimo bylaw that would have seen wireless companies collect levies from cellphone users to help pay for the 911 emergency service was quashed by the Supreme Court of B.C.

In November 2010, Nanaimo passed the country’s first bylaw requiring cellphone providers to collect a levy from its customers to assist in paying for the central Island 911 service, a move that could have saved Nanaimo taxpayers more than $500,000 annually. For wireless providers that didn’t adhere to the levy, the bylaw called for a $30 tax per call to 911 from a cellphone.

Historically, home-based land lines were charged 47 cents monthly to help fund the 911 service. Because of widespread cellphone use and the reduction of land lines, funding drastically decreased over the years as cellphones now account for 53 per cent of 911 calls in the region.

Nanaimo partners with the Regional District of Nanaimo and Cowichan Valley Regional District, both of whom passed similar bylaws, to operate the 911 service out of the Nanaimo RCMP detachment at an annual cost of about $1.5 million, one-third of which is covered by land line levies.

The city created the bylaw to require cellphone providers to pick up the slack and impose a user-pay system, instead of extending the operating cost of the service to taxpayers.

Last August, cellphone providers Telus Communications Corp., Rogers Communications Partnership and Bell Mobility filed a petition through the Canadian Wireless Telecommunications Association challenging the city’s ability to impose a levy on an industry governed by federal regulations.

“We think the judge made the most appropriate decision in the case,” said Marc Choma, spokesman for CWTA. “This issue has not been about proper funding for 911, I don’t think anyone has ever said that 911 doesn’t need to be properly funded. But to go through the route the city was going through, with a tax, is not an appropriate way and obviously not a practical way, if not impossible, from the industry’s point of view, to collect those funds.”

Nanaimo Mayor John Ruttan said council knew when it made the bylaw it might be challenged. He added that cellular providers already charge a monthly 75-cent 911 cellphone fee to subscribers, but none of it goes to funding the 911 service.

“Not one penny of that goes to the city, so the result is that the shortfall is $1 million has to be picked up by the taxpayers of Nanaimo. The telephone companies recognize there is an obligation to help pay for the service because they charge 47 cents for a land line, so why not extend that for its cellphone users?”

In his reasons for judgement, Justice William Ehrcke said the Canadian Radio-television and Telecommunications Commission regulates the industry’s billing requirements, and it does not require wireless service providers to participate in any 911 levy.

“The salient point is that the city lacks the authority to compel them to enter into an agreement,” wrote Ehrcke.

Shawn Hall, spokesman for Telus, said his company would be fine looking at a provincewide system, but it is impossible to collect a “hodgepodge” of municipally imposed taxes.

“A provincewide system would be manageable,” he said. “The problem with a series of municipal systems is that it is literally impossible for us to collect this tax. We can’t accurately identify which of our customers live in Nanaimo and which don’t. For many of our customers, like ones who are pre-paid, we don’t mail them bills.”

The central Island 911 call centre stretches from the Malahat to north of Lantzville and receives more than 50,000 calls annually, with an increasing number of those coming from cellphones.

Ruttan said staff and council would consult city solicitors to determine if an appeal is an appropriate next step.

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