BRITISH COLUMBIA TELEPHONE COMPANY

768 SEYMOUR STREET. VANCOUVER. CANADA V6B3K9 TELEPHONE: 662-8013 AREA CODE 604
TWX NUMBER: 610-922-6044

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ROLAND }. BOUWMAN .
VICE-PRESIDENT-GENERAL COUNSEL AND SECRETARY : : March 19 » 1975

Dear Sir:

I enclose a copy of the application.

; We believe this increase, though substantial, is
essential if this Company is to continue to meet its obligations
“as a public utility and a telecommunications carrier.

To improve and extend service to meet the growth
requirements and the demands of our customers, we must spend $500:
million within the next two years for new facilities and equipment.

We have been hard hit by inflation and continue to feel

-the impact of spiralling costs in every area of our operations.

We face an increase of more than 40% in labor costs.

We face new and increased taxes:

~ the new 10% corporate surtax (Federal)

- a 100% increase in utilized capital tax (Provincial)
an 8 1/3% increase in income tax (Provincial) —
increased gasoline tax (Provincial)
increased property taxes (Muni cipal)

We face sharply increased costs for power and fuel.

We face increased costs, at or above the inflation rate,
for most of the goods and services we use.

The current application is the third request we have
made for a rate increase in sixteen years. Our latest increase
provided revenue improvement in the order of 4.6% but, set against
-4n inflation rate of 12% or over, it does not improve our ability to
borrow the large sums of money we require for our construction
programs. (That application was prepared in 1973 when two-digit
inflation was not anticipated.)