MOUNTAIN VIEW COUNTY – The Alberta Urban Municipalities Association (AUMA) has come out in support of a call for action to address the issue of unpaid property taxes owed by oil and gas companies.
The association, which represents towns in this region as well as others across Alberta, says changes should be made to the Municipal Government Act (MGA) to secure unpaid taxes from oil and gas properties.
The MGA is the governing legislation for rural and urban municipalities in the province.
The Rural Municipalities of Alberta (RMA), which represents 69 municipalities, including Mountain View and Red Deer counties, recently released a survey showing that more than $170 million in unpaid property taxes is now owed to rural municipalities by oil and gas companies.
The non-payment of those taxes is creating significant financial concerns for rural municipalities, said Al Kemmere, Mountain View County councillor and president of the RMA.
“If Alberta’s property tax system is not amended to prevent oil and gas companies form refusing to pay property taxes, many rural municipalities will struggle to remain viable,” said Kemmere.
“Strengthening municipal tax recovery powers (through amendments to the MGA) would help address this issue, but broader action to address the industry’s struggles is needed, as the viability of both industry and rural municipalities is at risk.”
The AUMA has now come out in support of the RMA’s call for action.
“Municipalities, both urban and rural, are already the most transparent, efficient, effective order of government,” said AUMA president Barry Morishita.
“We cannot run deficits, which is why unpaid taxes by corporations are particularly unfair and result in increased costs directly borne by taxpayers.
“Since municipalities currently have no legislative tool to collect these owed taxes, we urge the provincial government to update the MGA so that municipal property taxes can be collected from oil and gas properties in the event of bankruptcy or receivership.”
As well as calling for changes to the MGA, the AUMA also believes that another change is needed, he said.
“We speak together as a united voice to say to the Alberta Energy Regulator (AER) that unpaid property taxes must also be considered as grounds for AER to deny a licence to operate in Alberta,” he said.
“Having municipalities shouldering these economic burdens from oil and gas companies impairs our economy. We must all support each other so we can share in brighter times ahead and build strong communities, and a stronger Alberta.”
The RMA says the amount of unpaid property taxes owed by oil and gas companies has increased 114 per cent since March 2019.
In a media release, Municipal Affairs Minister Kaycee Madu said the Kenney government is aware of the impact unpaid taxes have on rural municipalities.
“We are working to identify potential tools that may help balance the interests of municipalities with the economic realities facing many employers since the 2014-15 downturn,” said Madu. “This issue is complex, particularly given some of the companies involved have long since gone out of business.
“Although we have taken immediate steps to provide industry and municipalities with short-term support in these difficult economic times, we know we cannot kick the can down the road.”
The Canadian Association of Petroleum Producers says changes are needed to the province’s property assessment system to better address the depreciation of oil and gas assets, says Ben Brunnen, vice-president of fiscal and economic policy.
