Energy companies make up about 75 per cent of the unpaid property taxes and penalties this year in Ponoka County, though more surprising is the $1 million outstanding from other taxpayers. File photo

Ponoka County dealing with extraordinary rise in outstanding taxes

Nearly $4 million in property taxes, penalties remain unpaid

Ponoka County is experiencing an unprecedented increase in its outstanding property taxes and the issue isn’t as simple as blaming the downturn in the energy sector.

At council’s Sept. 10 meeting, CAO Charlie Cutforth brought up the issue when discussing the monthly budget report for August.

It showed the county is dealing with a shocking $3.9 million in unpaid property taxes plus penalties, that is more than double its budget of $200,000, as penalties now sits at $435,000.

“About $2.9 million is maintenance and equipment plus linear, while residential/farmland and commercial is about $1 million, which is highly unusual for the county if we look back at previous years,” explained Cutforth.

“In a typical year, the amount of outstanding taxes has been about $400,000. So when I see residential and farmland at $1 million, it makes me nervous.”

When asked by Reeve Paul McLauchlin what would likely be uncollectable from the current outstanding amount, Cutforth estimated the figure would be in $1 million range.

“Some of that is from arrears of previous years, but the majority is simply past due,” he said.

However, Cutforth added that would be on top of the $1 million of unrecoverable penalties on the outstanding taxes and the $1 million written off over the past few years through two energy companies going bankrupt.

“The majority of the operating oil and gas companies are paid up. However, it’s the ones that you expect that are not and, sadly, this is not their first time around declaring bankruptcy and then simply changing their name,” he said.

The county established a special reserve a couple of years ago, specifically to cushion itself from the potential of energy companies not paying their taxes or going under. The reserve is currently at $870,000, though Cutforth feels council may need to double that figure over the next few years to ensure the county is well covered.

The outstanding taxes work out to be approximately 14.5 per cent of Ponoka County’s overall property taxes of $26.45 million for 2019.

Coun. Doug Weir wondered where the county will find additional revenue, “Because you can’t go back to the taxpayers, as we can tell they are already hurting.”

Cutforth and the rest of council are wondering the same thing, with Coun. Mark Matejka questioning what the province intends to do about these energy companies.

“As part of the RMA (Rural Municipalities of Alberta), we’ve been trying to meet with Alberta Energy Regulator (AER) and have been literally ignored. We want a company’s unpaid taxes to be one of their liability indicators for operating, but we’ve gotten nowhere,” said McLauchlin, who is also an RM district director.

“There is also a bit of a tax revolt going on in some municipalities now and the recent situations with Trident and Sequoia are not helping. Things have gone as high as the energy minister, but I also don’t think this is over yet either.”

Waiting on budget

Unpaid taxes is just one financial hurdle facing the county, while municipalities are bracing themselves for another when the provincial budget comes out later this fall.

“We have the lowest residential/farmland taxes in the province and you want to believe the government knows that. And, if you read the finance panel report, they specifically identified that municipalities have kept their taxes low and farmed, milked government grants for years,” Cutforth told council.

“At one time that might have been true, but not in Ponoka County. One hundred per cent of our operation comes from our local property taxes. When the Municipal Assistance Grant was wiped out about two decades ago, everyone had incorporated it into their revenue and when it was gone we scrambled and swore to never again rely on anyone other than our local taxes.”

He added that for the next seven years, the county was barely able to gravel a road since raising taxes wasn’t possible due to the province tacking on a 15 per school tax hike for five years on county taxpayers.

McLauchlin further explained that the province is also cognizant of how much municipalities have in reserves and, coupled with looming funding changes to the Municipal Sustainability Initiative (MSI), the county is going to be left with two choices.

“We start to use our reserves to balance our cash flow, stop any capital donation contributions and once those funds get down to a level we are not comfortable with, we will have to change our mill rates,” he said.

“It’s going to be better to deplete your reserves than to tax your people.”

Just Posted

Bantam Broncs better on both sides in big win

Ponoka pounds Lindsay Thurber 38-12 in final regular season home game

Stamps off to excellent start

Ponoka’s junior squad has earned points in each game this season so far

Ponoka Youth Centre rolls back Before School Program to early start

Drop off to change to 6:30 a.m. starting Oct. 15

Our thriving town began as a whistle stop along Siding 14

By Mike Rainone for the News For those of us who were… Continue reading

VIDEO: #MeToo leader launches new hashtag to mobilize U.S. voters

Tarana Burke hopes to prompt moderators to ask about sexual violence at next debate

Alberta government won’t seek meeting with teen enviro-activist Greta Thunberg

NDP Opposition Leader Rachel Notley urged Alberta’s United Conservatives to meet with Thunberg

Maskwacis RCMP seek public assistance to locate missing female

Maskwacis RCMP are asking for public assistance to locate 21 year-old Kiona… Continue reading

Alberta to join B.C.’s class-action lawsuit against opioid manufacturers, distributors

B.C. government claims opioids were falsely marketed as less addictive than other pain meds

VIDEO: Trudeau, Singh posture for ‘progressive’ votes while Scheer fights in Quebec

NDP Leader Jagmeet Singh, whose party has been on the rise in recent polls, is campaigning in Toronto

Advance voter turnout up 25% for first two days: Elections Canada

Two million people voted Friday and Saturday

In the news: Sprinting to the election finish line and anger amid Manitoba storms

First Nations residents forced to evacuate their Manitoba homes after a recent snowstorm

Advance voting set to end

One last chance to vote in if you are not going to be home on Oct. 21

‘Save the kids!’ Dorian survivor tells the harrowing story of his Canadian wife’s death

Family held a funeral and placed Alishia Liolli’s remains in a niche at a cemetery in Windsor, Ont.

Most Read