Kneehill County council approved the cancellation of nearly $5 million of tax arrears and penalties on former Trident Exploration assets during the regular Tuesday, January 24 council meeting.
Property Tax officer Caroline Siverson presented the request to council and explained the arrears included levies from 2019 to 2022, as well as over $2.7 million in penalties, and some $8,500 in legal fees.
“Looking forward to 2023, there will remain assessments on assets that are under the Orphan Well Association; this will be around $250,000 on Trident assets,” Ms. Siverson explained during the meeting.
Prior to presenting the cancellation request, Ms. Siverson presented council with an overview of the process county administration takes regarding oil and gas industry tax arrears.
Ms. Siverson explained, once an oil and gas company declares bankruptcy, it goes into receivership and any valuable assets are sold; those assets which cannot be sold, called disclaimed assets, are then transferred to the Orphan Well Association (OWA) for reclamation. However, these disclaimed assets are still assessed by the province, leaving the municipality responsible for paying the provincial education requisition amount until such time as it is reclaimed.
The province does allow municipalities to apply for a tax credit equal to the education requisition on uncollectable oil and gas property taxes through the Provincial Education Requisition Credit (PERC) program. Ms. Siverson noted the county has so far received over $300,000 from the province through this program on other oil and gas properties.
The county currently has over $6 million in tax arrears owing across all properties for all years. Oil and gas tax arrears account for over 93 per cent of total tax arrears across all years, and 85 per cent of arrears in 2022; the total oil and gas tax arrears for 2022 total some $1.6 million.
The county has already cancelled some $4.18 million in tax arrears related to oil and gas companies since 2019.
Council unanimously approved the cancellation of $4,913,262.83 in tax arrears for Trident Exploration; this will reduce the total outstanding tax arrears to slightly more than $1.14 million.
