Council voted to restructure Hamilton Utilities Corporation to split the corporation into two.
The split is to allow for HCE Telecom and HCE Energy to challenge private telecom and energy producers in other municipalities.
HUC is a muncipal corporation under the Municipal Act, and enjoys an exception from federal corporate income taxes. HCE Telecom, and HCE Energy are presently subsidiaries of the corporation.
HCE Telecom has targeted Hamilton’s private telecom companies, using the advantage of being a municipal corporation to undercut Hamilton’s ISPs, data centres, and information solution providers.
HCE’s aggressive moves have caught the attention of the large national telecom companies – Rogers, Bell, and Cogeco have all made substantial investments in Hamilton and started lowering their business rates in preparation for HCE to target them more aggressively in the future.
HCE Energy is a micro-generation, cogeneration, and district energy company with some solar generation contracts as well.
HCE is now looking to compete outside of Hamilton.
Council is separating HCE from the hydro utility to enable HCE to grow into other communities. As a municipal corporation, As a municipal corporation, if it generates more than 10% of its revenue outside of the municipality, it losses its federal tax exemptions.
If HCE and the hydro utility both remained in one corporation, Hamilton taxpayers would face a federal tax liability of $300-million on the assets of the former Horizon Utilities.
The Corporate and Board Structure of the two operations has not been determined.
Mayor Fred Eisenberger, asked by The Public Record after the meeting says he does not expect the creation of the new corporation will result in any new Councillor Board of Director positions.
The merging of Hamilton’s hydro utility into the new Alectra corporation resulted in the creation of a new Director position on that Board, and a pay increase of approximately $35,000 per year for the Mayor.