Energy companies owe more than double the tax to Alberta municipalities

Survey says communities are owed $173 million — up 114% since last spring

A pumpjack works at a well head on an oil and gas installation near Cremona, Alta., Saturday, Oct. 29, 2016. THE CANADIAN PRESS/Jeff McIntosh

The amount of unpaid property taxes that oil and gas companies owe Alberta rural municipalities has more than doubled over the last year, a trend some are calling a tax revolt.

Rural Municipalities Alberta said Monday that a survey of its members shows that they are owed a total of $173 million — a 114-per-cent increase since a similar survey was done last spring.

“If Alberta’s property tax system is not amended to prevent oil and gas companies from refusing to pay property taxes, many rural municipalities will struggle to remain viable,” association president Al Kemmere said in a release.

Kemmere explained that municipalities want the province to change the rules so they can force companies to make good on tax debts. Property taxes on energy facilities are controlled by the province, not the local community.

“A lot of the oil and gas is doing their fair part as citizens, but we need legislation to force others to pay much like everybody else has to pay,” said Kemmere.

In Ponoka County, south of Edmonton, Reeve Paul McLauchlin estimates his municipality is owed about $2.6 million out of a total municipal budget of $27 million.

“It creates operational constraints, our ability to provide community services. We have non-profits asking for assistance. We say ‘no’ more and more.”

Industry says the way taxes are assessed is driving companies out of business. Properties are assessed by the provincial government, which evaluates them on replacement cost and not on market value, said Ben Brunnen, vice-president of the Canadian Association of Petroleum Producers.

“We defend the need for the province to take a look at how assessment works and have it reflective of the market,” he said.

“A lot of these unpaid taxes are coming in jurisdictions where you’ve got assets that are older and not as productive or economic. The choice for these types of assets is to shut (them) in or find a way to reduce costs.”

Those shut-in wells often end up abandoned and unreclaimed after a bankruptcy, said Brunnen, who suggested some municipalities are going to have to accept less oil and gas revenue.

The Alberta Court of Appeal ruled last year that municipalities are unsecured creditors, which puts them at the back of the line for tax debt collection after a bankruptcy.

KEEP READING: Alberta promises to fix rules on aging energy wells

Bob Weber, The Canadian Press

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Province commits long term to 4-H in Alberta

10-year funding commitment will sustain re-structured 4-H organization

STARS praises Ponoka County as leader in province

Annual update from STARS shows big progress on helicopter campaign

Short bench for tournament host Queens

Rebuiling year sees club wind up seventh

Town selling the airport to Ponoka Flying Club

Agreement is for 25 years with option to buy back

RCMP on hunt for man who has skipped court

Public urged to call 911 if they spot him

Governor general says multiple solutions needed for ‘complicated’ overdose issue

Julie Payette met at a fire hall with firefighters and police officers as well as politicians and health experts

Violent ends to past Indigenous protests haunt Trudeau government

Trudeau adopted a more assertive tone Friday, insisting the barricade must come down

Blockades remain in place as Wet’suwet’en hereditary chiefs returning to B.C.

Hereditary Chief Woos said they are ready to engage in nation-to-nation talks with the B.C.

Two goals by Ben King pushes Rebels over Tri-city

7-5 game a high-scoring, runaway according to Rebels forward Chris Douglas

‘Nothing surprises us anymore:’ U.S. border officials find brain in package

U.S. Customs and Border Protection agents found the brain packed in a glass mason jar in a Canada Post shipment

Eyes on police after Trudeau orders blockades torn down, injunctions enforced

The RCMP in B.C. have sent a letter to the traditional leaders of the Wet’suwet’en Nation

Alberta doctors getting ready for court fight against new pay, benefits deal

United Conservative government says Alberta doctors make more than physicians in other provinces

VIDEO: Outpouring of worldwide support for bullied Australian boy

Australian actor Hugh Jackman said ‘you are stronger than you know, mate’

Trudeau: Time for blockades to end and Indigenous leaders to work with government

Prime minister says situation in Coastal GasLink pipeline dispute is ‘unacceptable and untenable’

Most Read