Taxpayers ripped off by Gas Franchise Fee Scandal

2022 update as at March 22, 2023

Researched and prepared by Gary Korpan

[Note: The original 2015 report below, now updated as of March 22, 2023 outlines this long standing issue. Some progress finally happened in 2014 when legislation permitted partial payments to the affected communities. However, as the latest new data shows, the essential financial disparities continue. Financial data for financial year 2022 now updated to March 22, 2023 to account for delayed 2022 payment to City of Nanaimo...(see attached spreadsheet or jpg image.)]

Original Report to Citizens, media, and MLA election candidates 2015 (now updated)

Latest $ Lost in Continuing Natural Gas Franchise Fee Scandal

The latest data on the millions of dollars we lost in 2022 due to one of the greatest scandals in BC history, the continuing egregious Vander Zalm Vancouver Island Gas Pipeline Act, have now been updated. You and your fellow citizens continue to subsidize the gas company for something that has long been paid for. The further outrage is our communities are prohibited from receiving the same level of compensation for damage by the natural gas distribution company to our infrastructure (cut roads, sidewalks, water, sewer & storm lines) that is received by most of the rest of BC. The new data show in 2022, for example, while Kelowna received $1.7 million, Kamloops $1.2 million, Prince George $1.7 million, all Vancouver Island and Sunshine Coast communities received a fraction of that!

[Even still, those communities receiving so-called “full” Natural Gas Franchise Fees are NOT receiving the full and fair compensation one is entitled to when their property is damaged. Corrupt legislation minimizes the damage compensation and taxpayers end up covering the remainder and thus subsidize the entity that caused the damage. This disgraceful situation occurs throughout Canada as a result of corrupt laws created to give protection from, ‘full and fair compensation’ judgments in damage claims, to a favoured corporate elite such as railways, oil and gas pipelines, electrical transmission lines, and other utility infrastructure.]

Contact your MLA's and MP’s and demand an end to this travesty. Full information on this is available at

(click on attached Gas Franchise Fees 2022.jpg image for a more readable image)

Serious Continuing Issue for Vancouver Island & the Sunshine Coast taxpayers  (original 2015 report updated)An outrageous abuse of Vancouver Island & Sunshine Coast local taxpayers specifically, and BC taxpayers in general, continues to be most serious.

Essentially, our poorest citizens, who will never benefit, are subsidizing the richest, and a private company. Vander Zalm's egregious Vancouver Island Gas Pipeline Act of 1989 continues to prohibit our communities from receiving the same level of compensation for damage by the natural gas company to our infrastructure (cut roads, sidewalks, water, sewer & storm drain lines) that is received by most of the rest of BC. (See attached image of the latest updated table of millions of dollars received by cities we are compared to and must compete against economically.)  As a result of this discrimination, Vancouver Island & Sunshine Coast communities received zero franchise fee revenue compensation between 1990 - 2016 while eg. Kelowna received $28,499,645! Since this scandalous policy was implemented (without warning or any consultation with those detrimentally affected) our communities have lost tens of millions of dollars in revenue (see Excel spreadsheet table attached). The result of this policy has been that every property owner (residential, commercial, industrial) in this region is subsidizing the private natural gas company. This additional burden makes job-creation all the more difficult as it puts regional business at a property tax disadvantage compared to their competition elsewhere in the province. Decisive rectification was long promised and finally led to 2014 legislation which permitted partial payments to the affected communities. However, as the latest new data shows, the essential substantial financial disparities continue. [Financial data updated to 2022...see attached spreadsheet or image of spreadsheet.]

The disparate cumulative totals 1990-2022 are astounding:

Kamloops - $32,499,444

Penticton - $10,984,879

Kelowna - $36,441,243

Prince George - $35,373,776

Nanaimo - $4,265,218

B.C. must rescind such corrupt legislation and end all the continuing discriminatory disparity.

We must demand all MLA's pledge to restore regional equity, end subsidization of the natural gas company by taxpayers, and hold accountable those who sold us out. Demand the following being enacted at the next sitting of the legislature session.

1) End all restrictions (corrupt legislation) prohibiting communities from being fully and fairly compensated for the damage to their infrastructure.

2) Public audit by the Auditor General of all pertinent funds to determine how long the pipeline project has been paid for and seek reimbursement of over payment.

3) Freeze any annual BC subsidy payment (once over $30 million) until proof of need is made.

4) Declare the original agreement void for fundamental unfairness and possible illegality.

5) Appoint a judicial inquiry with subpoena powers to investigate how such a bad, unconscionable agreement was made.

6) Send those who unjustly and illegally enriched themselves to jail.

7) Provincial legislation requiring mandatory full and complete repairs, to industry standards, by any party damaging municipal works and services.

I attach the above updated tables comparing the substantial revenue to "other area" municipalities with the long time (1990-2016) totally deprived communities on Vancouver Island and the Sunshine Coast. Thank you for your consideration and assistance in rectifying this long-standing inequality. Yours truly,

Gary Korpan - Nanaimo Council (1984-2008), Nanaimo Mayor (1993-2008),
Council Representative on Task Force to Attain Natural Gas to Vancouver Island (1984-1990)
Confirmation of the accuracy of this information can be made by viewing City of Nanaimo Policy Position Paper on Gas Franchise Fees here:

UBCM 2008 resolution (repeatedly re-endorsed annually since 1993)

B1 GAS FRANCHISE FEES sponsor Nanaimo City

WHEREAS section 22 of the Community Charter provides that a council may, by bylaw adopted with the approval of the electors, enter into an agreement that grants an exclusive or limited franchise for the provision of a public transportation system, water through a water supply system, sewage disposal through a sewage system, or gas, electrical or other energy supply system;

AND WHEREAS such agreements traditionally include a service fee with utility companies to compensate for the costly disruption and repair of roads, water, sewer, storm drains and other municipal infrastructure caused by installation of the utility system works;

AND WHEREAS section 7(5) of the Vancouver Island Natural Gas Pipeline Act revoked the ability for municipalities and regional districts on Vancouver Island and the Sunshine Coast to set such rates or charge fees by means of section 22 of the Community Charter, thereby passing the infrastructure repair costs onto local taxpayers (including those who will never be connected to natural gas):

THEREFORE BE IT RESOLVED the Union of BC Municipalities (UBCM) urge the provincial government to amend the Vancouver Island Natural Gas Pipeline Act immediately in order to restore equal rights on this matter and provide fair and equal treatment for all local government taxpayers in British Columbia;

AND BE IT FURTHER RESOLVED that UBCM appeal to the Auditor General to undertake a review to determine if the pipeline has been paid for.




The Resolutions Committee notes that UBCM membership has endorsed previous resolutions in support of revoking those clauses in the Vancouver Island Natural Gas Pipeline Act that prevent the provision of adequate compensation to Vancouver Island communities.

Adopted unanimously September 25, 2008 (passed annually since 1993)

"All that is necessary for the triumph of evil is for good men to do nothing."  - attributed to Edmund Burke
Postscript 2014 - A few recipients have suggested that this long standing problem is "only now being publicized", suggesting some ill-motive. My response has been:

Actually, both Mayor Leach and I have led each Nanaimo Council to annually seek the support of the Assn of Vancouver Island Coastal Communities and the Union of BC Municipalities to pass motions calling on the various Socred, NDP, & Liberal governments to rescind Vander Zalm's sellout legislation. Every time, those resolutions pass unanimously. I have personally presented the annually updated data to each Premier, each Minister of Finance, each Minister of Energy, each Opposition Leader, since the Act was slid thru in 1989. Every time they agreed this was terrible and they would look into it. Nothing has happened. All media in the region have been regularly updated as well. The rip-off continues. You and your fellow citizens continue to subsidize the gas company for something that has long been paid for. Please call your MLA to ensure they pledge to end this travesty.

Gary Korpan  250-758-9445

{Addendum Oct. 2, 2018 - To add insult to injury, as any driver can attest to, the natural gas company is one of the worst offenders at tearing up City of Nanaimo roads and infrastructure then incompetently “repairing” them. Clearly the historic legal principle that “one who damages another must fully compensate or restore to a quality equal to that existing prior to the harm they cause” is not being enforced in Nanaimo’s case. A prime example is the huge cut at the 4000 block of Departure Bay road which was poorly repaired for months. Finally, my complaints expedited action for improved repairs as of  yesterday October 1, 2018...though I have little confidence they will be of proper quality and longevity.} Municipal roads are constantly cut and improperly repaired by 3rd party utilities leading to premature failure and increased costs borne by taxpayers.