Municipalities in Alberta received a sign from the provincial government last week to help collect unpaid taxes from oil and gas companies.
According to a press release, Energy Minister Pete Guthrie is issuing a ministerial order under the Responsible Energy Development Act requiring the Alberta Energy Regulator (AER) to receive evidence that municipal taxes have been paid when approving licence transfers or new licences.
“Our government is serious about addressing the ongoing problem of unpaid municipal taxes. This problem has lingered for far too long, and while some viable companies have started to pay their back taxes, others are still not getting the message. This direction to the Alberta Energy Regulator will have real consequences for those delinquent companies. In Alberta, we pay what we owe, and it’s time to pay up,” said Rebecca Schulz, Minister of Municipal Affairs.
According to the directive, companies will now have to confirm that their unpaid municipal taxes across the province do not exceed the maximum threshold allowed or that they have a repayment agreement in place whenever they apply for new licences or for licence transfers because they’re seeking to sell their assets.
Reeve of Starland County Steve Wannstrom learned of the changes at the Rural Municipalities of Alberta (RMA) Spring Convention last week.
“I spoke to the Minister of Municipal Affairs, and it should help,” said Wannstrom. “There are some that are going to fit through a loophole, I think.”
He explains the county is working with a couple of companies they are having trouble collecting from and hopes this will help them collect.
“It will work for some I think,” he said. “Another part that people are concerned with is it won’t address the farmers and landlords that are not being paid their lease payments. They might pay their taxes but they might cause more grief to the farmers.”
One concern he had asked about was the directive noted there was a threshold.
“She (Minster Schulz) indicated the threshold might be around $50,000, but all of ours are well over that. We are looking at a one and half million and $700,000 for the other one,” said Wannstrom.
He says currently there are over $2 million in unpaid taxes outstanding.
“We have lost approximately $12 million to date, but Trident is gone so we can’t ever recover that,” said Wannstrom.
Reeve Jerry Wittstock of Kneehill County welcomes the announcement.
“I think it is great the province came out with a ministerial order to see if they can force these guys to pay their oil and gas taxes. I'm not exactly sure what is going to trigger it. If it is going to be a transfer of licenses or trying to buy licenses, but with that being said, it's about time something was done. It is getting ridiculous and adding up and up.”
The RMA sees promise in the order.
“Unpaid oil and gas property taxes have been the RMA’s top advocacy issue for several years and resulted in rural municipalities across the province losing a collective $268 million in revenue that would be used to provide infrastructure and services across rural Alberta. We appreciate that this is a complex and politically sensitive issue, and the ministers of Municipal Affairs and Energy deserve credit for taking action to stand up for rural municipalities and all taxpayers in Alberta. This action represents major progress in holding accountable the small number of oil and gas companies that operate without paying taxes,” said RMA President Paul McLauchlin.
