A resource production corporation had its proposed plan to deal with some outstanding taxes was declined.
Essex Oil Corp. based out of Airdrie informed Ponoka County in a letter brought up at a recent county meeting, that the company’s financial difficulties are getting worse. It is looking for a way to resolve the outstanding tax balance as well as look at this year’s taxes.
Essex president Rick Martin explained that the main issue for the company is the long-term low price natural gas market, which has forced many companies to shut-in wells and stop production as the wells are costing money instead of creating revenue.
“As a consequence, the company is not generating enough revenue to manage its payable accounts in the short term,” Martin stated in the letter.
Essex proposed to hand over more than 31,000 Class A shares in the company — equivalent to 20 cents per share — to pay for the 2017 taxes owed, which amount to around $6,200 not including interest and penalties.
In addition, Essex asked for an extended payment time, until the end of 2018, for the $8,600 in taxes and penalties accumulated to date. The proposal also noted the company is not making any capital spending until its commitments are met.
In bringing the topic before council, CAO Charlie Cutforth noted the letter was presented simply to inform councillors about the situation as the county is not able to accept the idea as proposed.
“The municipality is not able to hold shares in this manner. But, this is an indication of the economy in Alberta and it’s simply a way the company is trying to pay the bill,” Cutforth said.
He added that a meeting will be set up with Essex to go over the situation.
“We’ll treat them just like any other taxpayer that is experiencing difficulties,” Cutforth said.
So, in that interest, council approved a recommendation to waive the penalties incurred for 2017 and 2018 as well as make an agreement with Essex for a repayment schedule that will best fit the situation.