ARCHIVED - Decision CRTC 2001-773
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Decision CRTC 2001-773Ottawa, 21 December 2001 Reference: 8663-C12-06/01
Mr. David Palmer Dear Mr. Palmer: Subject: Harmonization of thresholds and tax rates on telecommunications networks in the Province of QuebecOn 20 October 2000, the ministry of finance for Quebec issued bulletin 2000-6, announcing the harmonization of thresholds and tax rates on telecommunications, gas distribution, and electric power networks (TGE), effective 1 January 2001. In response to a Commission staff interrogatory, Bell Canada recognized that the proposed TGE changes meet the criteria for consideration as an exogenous factor under the current price cap regime. However, the company stated that while it paid the 2001 TGE tax based on the revised thresholds and rates, the enabling legislation that would confirm the change has not yet been passed into law by the Quebec legislature. Bell Canada also stated that it used the same methodology approved in Order CRTC 2001-100 with respect to the Ontario gross receipt tax (GRT) to allocate the savings from the harmonization of rates and thresholds of the TGE tax to calculate the impact on the company's price cap index (PCI). The Commission finds that changes to the TGE thresholds and rates constitute an exogenous event under the existing price cap regime if they are enacted by the Quebec legislature with an effective date prior to the start of the new price regulation regime. In addition, the Commission finds Bell Canada's methodology for allocating the TGE savings to the PCI and sub-baskets appropriate. However, in light of the fact that the proposed changes are not yet law, the Commission is of the view that it would be premature to require the company to reflect the TGE savings in its PCI at this time. Therefore, and recognizing that the proposed TGE changes have not yet been enacted and that there will soon be a new price regulation regime, the Commission directs Bell Canada to record any TGE savings pertaining to capped services in a deferral account, effective 1 January 2001. Furthermore, Bell Canada is to immediately advise the Commission when the status of the proposed TGE thresholds and rates is resolved by the Quebec legislature. At that time, the company should propose a plan for the disposition of any amounts in the deferral account and propose how any on-going savings should be reflected in the price regulation formula. Yours sincerely,
Ursula Menke cc.:John Paoletti, CRTC (819) 997 4588 Date Modified: 2001-12-21 |
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