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Gross revenue charges for hydroelectric generating stations

Learn what taxes need to be paid by anyone who owns a hydroelectric generating station or has a lease for water power.

This online book has multiple pages. Please click on the Table of Contents link above for additional information related to this topic.

Overview

Hydroelectric generating station owners and water power leaseholders need to register with the Ministry of Finance to pay taxes and charges on their gross revenue. The taxes and charges owed are known as the gross revenue charge (GRC). Gross revenue is calculated by multiplying the station’s annual generation for the year by a price of $40,000 per gigawatt hour.

The gross revenue charge is broken into three parts:

  • property taxes payable to the Minister of Finance
  • property taxes payable to the Ontario Electricity Financial Corporation
  • water rental charges payable to the Minister of Finance

All three parts of the gross revenue charge can be paid by cheque or money order.

Gross revenue charge rates

Property tax rates

The amount of property tax owed depends on how much electricity the station generates each year.

Total annual generationGRC  rate
Less than 50 gigawatt hours (gWh)2.5%
400 or less (but more than 50) gWh4.5%
700 or less (but more than 400) gWh6.0%
More than 700 gWh26.5%

Property tax revenue is split between the Minister of Finance and the Ontario Electricity Financial Corporation.

Water rental charge rate

A fixed rate of 9.5% on the station’s annual gross revenue is charged for water rental, regardless of how much water the station uses.

Filing a return

Every year a personalized gross revenue charge return will be sent by mail. The return needs to be completed and filed by March 16.

You can file your return by mailing it to:

Ministry of Finance
33 King Street West
PO Box 620
Oshawa, Ontario
L1H 8E9

The return can also be filed at a Ministry of Finance tax office or at certain ServiceOntario locations.

Learn how to complete the annual gross revenue charge return

Paying the tax

There are three payment options, depending on how much tax is owed.

If the total amount is:

  • less than $1,000, a single payment can be made
  • between $1,000 and $10,000, quarterly instalment payments are required
  • $10,000 or more, monthly instalments are required

Payment instructions are included in the remittance form you receive with your personalized gross revenue charge return. The gross revenue charge can be paid by cheque or money order. Payments cannot be made at financial institutions or banks.

Summaries will not be issued for each instalment paid, but the total payments will be shown on the Notice of Assessment once the annual tax return has been filed.

Quarterly Instalments

If the total amount payable for all stations owned is more than $1,000 but less than $10,000, payments will be made in quarterly instalments.

Payments are due to the Ministry of Finance on the 16th of March, June, September and December of the year.

With each quarterly instalment, you must submit the remittance form included in your personalized gross revenue charge return. See Paying the Tax.

To calculate how much you have to pay each quarter, take the total amounts payable for all of your stations from this year and divide by four. Repeat the calculation for the previous year. The lower of the two amounts is the amount payable.

Monthly Instalments

If the total of the amounts payable for all stations is $10,000 or more, monthly instalments are required.

Payments are due on the 16th of each month.

To calculate your monthly payments:

For January and February, you’ll need to pay the lesser of:

  • 1/12th of the total of the amounts payable for the year, and
  • 1/12th of the total of the amounts payable from two years before

For example, if you owe $12,000 for 2017 and $13,500 from 2015, your monthly payment would be $1,000 from this year ($12,000/12 = $1,000) or $1,125 from 2 years prior in 2015 ($13,500/12), whichever is lower

Your total monthly payment would be $1,000, not including interest.

From March to December, you’ll need to pay the lesser of:

  • 1/12th of the total of the amounts payable for the year, and
  • 1/12th of the total of the amounts payable from last year

For example, if you owe $14,400 for 2017 and $12,000 from 2016, your monthly payment would be $1,200 from this year ($14,400/12 = $1,200) or $1,000 from 2016 ($12,000/12 = $1,000), whichever is lower

Your total monthly payment would be $ 1,000, not including interest.

With your monthly instalment, please submit the remittance form included in your personalized gross revenue charge return. See Paying the Tax

Learn more about how to submit your gross revenue charge instalment payments

Interest

Interest is charged daily on any unpaid portion of any amount payable, from the day the payment is due to the day the payment plus interest is received.

Interest is allowed on any overpayment for each day there is a surplus in a person’s tax account.

Related

Read more about the taxes and charges on the gross revenues of hydro-electric generating stations

Hydro-electric generating stations and endangered or threatened species

Updated: March 28, 2022
Published: March 22, 2022