MOUNTAIN VIEW COUNTY – Red Deer and Mountain View county officials are calling for more dialogue regarding proposed changes to the assessment model process for oil and gas properties and facilities.
The changes could lead to large increases in residential and business taxes and/or service level cuts going forward, says Mountain View County Reeve Bruce Beattie.
The county has sent letters to Rimbey-Rocky Mountain House-Sundre UCP MLA Jason Nixon and Olds-Didsbury-Three Hills UCP MLA Nathan Cooper calling for the proposed changes to be reconsidered.
“Assessment losses of this magnitude will require Mountain View County to reduce service levels and will require us to default on the financial commitments we have agreed to in our intermunicipal collaboration agreements with our urban partners to remain viable,” said Beattie.
“These changes will impact not only our Mountain View County and the services we provide to residents and businesses, but the entire region. We badly need your support in urging your government colleagues to reconsider these changes and work with municipalities to better understand their impacts.”
The four options being considered by Municipal Affairs are a seven per cent assessment decrease, a nine per cent assessment decrease, a 14 per cent assessment decrease, and a 20 per cent assessment decrease.
Under any of the four scenarios being considered, many rural municipalities would be seeing marked declines in tax revenues from oil and gas companies.
By way of example, in Mountain View County under the seven per cent scenario, the municipality would receive about $2.3 million less a year, and under the 20 per cent scenario more than $7 million less a year.
MLA Cooper says he would like to see further dialogue among stakeholders, including area councils, before the government moves forward with any final decision on changing the assessment model.
“I have heard from many rural residents who are concerned,” Cooper said in an interview. “It’s important that we encourage dialogue and I’m happy to hear from residents and what are their specific concerns.
“It’s important that we strike the right balance. I’m not suggesting this is the right balance but I think it’s a good time to make sure that we get the right balance moving forward.
“We always need to do a good job balancing our competitiveness with taxation. It’s a good time to have a conversation around this issue.”
The provincial cabinet would have to make any final decision on changing the assessment model, he said.
“I think it is important to stress that no final decision has been made,” he said. “It will eventually be a decision of cabinet should the minister make the decision to proceed with one of the four options.”
MLA Jason Nixon was on vacation last week and unavailable for comment.
Red Deer County impacts
Red Deer County Mayor Jim Wood called the proposed changes “unfair” to rural taxpayers in the municipality, noting a loss of nine per cent of tax revenue under the new assessment would cost the county $4.4 million.
“There are better ways to make our oil and gas industry competitive,” Wood said in a media release. “There are ways through policy direction that do not create such a terrible burden on the rural residents and businesses of this province. There is also a lack of transparency about future impacts, since the proposed changes only reflect a one-year time period.
“To compensate for the loss of tax revenue, the county will have to adjust operations through a large increase to property taxes up to 32 per cent, a severe reduction in service levels or a combination of the two.”
The Rural Municipalities of Alberta (RMA), which represents 69 rural municipalities in the province, says rural municipalities could lose more than $480 million in 2021 alone under the proposed assessment model changes.
“These changes simply don’t work from a municipal viability or an industry competitiveness perspective,” said Al Kemmere, RMA president and Mountain View County councillor.
“Going through with these changes to the assessment model will result in rural Albertans wondering if they will receive a fair deal from the provincial government.”
The RMA is calling for further dialogue with Municipal Affairs prior to any changes to the assessment model being made.
Kemmere says he has a meeting scheduled with the minister of Municipal Affairs on Aug. 27 to discuss the assessment issue.
Municipal Affairs spokesperson Timothy Gerwing provided the following statement to The Albertan: “A careful balance has to be found to ensure both sides are strong and viable. Government has been consulting on this matter and will continue to do so. No decision (on changing the assessment model) has been made at this time.”
