Alberta's rural communities say delinquent oil companies need to 'step up'

Vulcan County administrators say oil companies owe them $11.8 million in unpaid taxes.

LETHBRIDGE -

The Alberta government is introducing legislative amendments that it says will help municipalities collect unpaid taxes from oil and gas properties.

Municipal Affairs Minister Ric McIver announced changes to the Municipal Government Act Thursday afternoon.

"This is a hammer," he said.

"I guess you can debate whether it's a medium or large sized hammer but it's definitely a hammer and a hammer that the municipalities need."

The largest change is to restore and clarify a special lien for unpaid property taxes on property, machinery and equipment.

"This legislation is intended to help municipalities go after those companies who refuse to play by the rules," said McIver.

"Bad actors who ignore the rules and don’t pay their taxes force everyone else to fill in the gaps – that’s not fair."

McIver says the amendments will result in several changes that will take effect when they are proclaimed:

• Hold the property owner, and the operator of oil and gas machinery liable for unpaid taxes;
• Create a 120-day redemption period between when taxes are due and when the special lien is enforced and;
• Special liens will apply to all debtor’s property within the municipality.

McIver says this restores a tool that communities lost two years ago after a court ruled that such liens didn't apply to the oilpatch.

The province is advising any company with an outstanding tax bill to contact their local municipality to discuss the changes.

According to a survey sent out by Rural Municipalities of Alberta (RMA), there is currently on overall unpaid oil and gas property tax burden of $245.7 million.

This represents a 42 per cent increase from RMA's 2020 member survey and a 203 per cent increase from 2019.

McIver said the province is willing to go further if the special lien doesn’t prove effective.

"We’re hoping that doesn’t happen,” he said. “If it does, I will certainly have conversations with municipalities and energy companies."

In southern Alberta, Vulcan County is currently facing a unpaid tax bill from oil and gas companies of $11.8 million.

According to the county's Reeve Jason Schneider, this doesn't just leave them picking up the tab, but also the residents.

"Vulcan County is 3,950 people, so it's over $3,000 per resident that is owed in oil and gas and uncollected taxes at this point," Schneider told CTV News.

"If you want to put that into perspective, if that was the same level in the city of Calgary, it'd be $4 billion."

Schneider went on to add that any type of accountability program that helps them get at least some of the debt paid off is welcome and that energy companies need to step up.

"If you want to continue to operate in Alberta as an oil and gas company, you need to pay your taxes," he said.

"I know that there are companies that endure financial trouble, but putting municipalities as a secure creditor would be a step in the right direction."

When it comes to the province as a whole, the RMA says called the new amendments "an important step" towards keeping companies accountable about their tax bills.

 

“RMA appreciates the government of Alberta recognizing the importance of this issue and looks forward to working with provincial decision makers to ensure that the changes announced today make a meaningful difference for municipalities,” said RMA president Paul McLauchlin.

Municipalities rely on property taxes as a primary source of income and are legally required to balance their budgets, meaning lost tax revenue cuts into services they provide.

The province says between 40 and 60 per cent of unpaid taxes are the responsibility of companies that continue to operate in Alberta, with the remainder belonging to companies facing insolvency.