Starland County has recently been notified by the Provincial Government of proposed changes to the way property taxes are collected on the oil and gas industry. Under current tax rates, the new system proposed by the province would result in a loss of between $2.6 million and $3.75 million dollars for Starland County. Farmland and residential taxes would need to increase nearly 200% to make up for the loss of revenue. As program and capital spending have already been cut dramatically in recent years, the only way to continue to function with a base level of services would be some combination of large tax increases on farmland, residential ratepayers, and on the remaining junior oil and gas companies still operating within the County, as well as further reducing or eliminating services.

Years of assessment reductions since 2015 have already left Starland County in a situation where sustainability of services is in doubt. These further reductions amount to nearly a quarter of the revenue that remains after years of reductions. These last years have seen an operational budget of $14 million dollars reduced to $10 million with capital equipment being virtually eliminated. Without major changes to taxes and services, these new reductions put the sustainability of Starland County in question.

Through these changes the Provincial Government is attempting to shift money out of rural Alberta and onto the balance sheets of the largest oil and gas companies operating in the province. In fact, 70% percent of the proposed benefit of these changes is going to just 27 oil and gas companies out of the nearly 800 oil and gas companies that are affected by these changes. This means that in some cases smaller operators will actually end up paying more. These large companies are under no obligation to invest the savings into rural Alberta and we do not expect them to while commodity prices remain low. The net effect is increased profits for big oil and gas combined with higher taxes and unemployment for rural Alberta.

The final decision on these changes is expected by mid to late August so we need to act now! If this proposal is approved there will be disastrous consequences for Starland County’s ratepayers. Starland County urges its residents and farmers to contact the Provincial Government representatives and let them know your thoughts on this issue. I have met with our MLA to voice our concerns and Council has a pending meeting with our local MLA to discuss this issue. Your support will be crucial in defeating this proposal.

Kneehill County has been notified of changes proposed by the Province of Alberta that would reduce property taxes for some oil and gas companies through changes to the way their assessment is conducted. These proposed changes would have severe impacts on both the County and our residents—resulting in an increase in property tax, a reduction in services, or a combination of both to make up for the lost revenue.
The intent of this decision is to increase the competitiveness of oil and gas companies while maintaining municipal sustainability, however, the proposed changes will greatly benefit large oil and gas companies while actually harming smaller local firms, local businesses, and municipalities. The proposed changes include no regulations to ensure the money saved from the reduction in taxes will be channeled back into Alberta to help the local oil and gas sector. Overall, there seem to be few benefits to this decision that would outweigh the detrimental impacts that the County and our residents would face as a result. The main result would be a large shift in tax burden from industry to residents and other businesses.
Four possible scenarios are currently being presented by the Province. Based on the information provided through the Province, in the “best” proposed scenario Kneehill County would experience a revenue loss of $3,509,439. In the worst case scenario, the loss would be $7,068,244. Revenues are expected to be further decreased in future years as facilities artificially depreciate. For perspective, in 2020 all residential and farm taxpayers in the County will pay just over $2.8 Million in combined municipal taxes. Even following drastic cuts to services, extreme tax increases and service fee escalations would likely still be required. While the revenue loss to the County represents 22% of total revenues or $7.1 Million, a 100% increase in residential and farmland taxes would only generate another $2.8 Million. If these changes are adopted, they are expected to be implemented for 2021. Kneehill County does not want to see any of these proposals adopted as they negatively impact residents and will not meet the Province’s stated outcomes.
If this proposed change is passed Kneehill County ratepayers and residents WILL BE IMPACTED – either financially through property taxes, in a potential loss of service from Kneehill County, or both.
Many services provided by the County would have to be cut or eliminated. County support of other municipalities and organizations will have to be decreased or eliminated, and there would certainly be an increase in property taxes for residents and businesses in the County. With the additional changes to the Police Funding Model imposed on the County by the Province, on top of historical unpaid taxes from oil & gas, County residential taxpayers will see significant property tax increases in the coming years and receive fewer services for those tax dollars if the Province’s proposed changes go through.
What can you do?
Please let your MLA know your thoughts on this issue.
MLA Nathan Cooper Phone: 403.556.3132
780.427.2464
Email: OldsDidsbury.ThreeHills@assembly.ab.ca
The final decision on this proposal is expected by mid to late August. Please act now, and take part during this crucial consultation period. Kneehill County Councillors will be engaging the Province and working with the RMA (Rural Municipalities of Alberta) to advocate on your behalf as well.
More information on this issue can be found at www.kneehillcounty.com.