MOUNTAIN VIEW COUNTY - Regardless of newly-announced provincial government plans to ensure that oil and gas assets being sold by bankrupt companies go to responsible producers, oilpatch companies still need to pay the taxes they owe to municipalities, says Mountain View County Reeve Angela Aalbers.
“It is Mountain View County’s firm belief that all taxpayers should fulfill their obligation of paying their share of taxes as determined by our democratically-elected governments,” Aalbers told the Albertan.
“While we acknowledge the province’s intention to maximize oil and gas reserves and alleviate pressures on the Orphan Well Association, Mountain View County considers this relaxation by the province a step backwards in restoring the credibility of the oil and gas industry in the eyes of all taxpayers, while continuing to place the financial burden on municipalities.”
Alberta Energy Minister Brian Jean said last week that changes are being made to regulations regarding the sale of bankrupt oil and gas company assets.
In a statement sent to the Albertan, Jean said he has “informed the Alberta Energy Regulator and the Orphan Wells Association that he will be amending the (ministerial) order in a way that will protect the value of productive assets and ensure that they can be acquired by responsible operators.
“Government, municipalities and industry all agree that productive assets need to get in the hands of good companies where they will generate economic value and pay municipal taxes.”
Asked by the Albertan whether the planned changes will include companies not having to cover unpaid taxes of the selling companies, a spokesperson for minister Jean said, “If it’s a receivership or a court process, they won’t have to clear out all the back taxes. We are still figuring out all of the pieces, but whatever changes we make will only be when purchasing assets out of a receivership or other court process.
“If you are buying it because it is going to be out of a receivership or court process, we are trying to figure out all the details.”
Asked if the purchasing companies will have to clear out some of the back taxes, he said, “That is yet to be determined. The exact specifics have not yet been arrived at.”
Paul McLaughlin, president of the Rural Municipalities of Alberta (RMA), says while he welcomes provincial government plans vis-a-vis the sale of assets by bankrupt companies, he also believes more needs to be done to make companies come up with unpaid taxes they owe to association members.
“These issues could be solved quite quickly by having the Alberta Energy Regulator (AER) enforce their own directives,” McLaughlin told the Albertan. “We are asking the government to enforce their own regulations. I continually ask and I have continually heard from two premiers and four energy ministers that everybody should pay their taxes. The tools are in places and I’m constantly hearing that it is more complex than that.
“The payment of taxes is one of (AER's) indicators for the ability to licence and operate a well. We’ve been consistently been asking the AER to enforce that as compliance issue, to make it a requirement for operating wells.”
Representing 69 municipalities including Mountain View and Red Deer counties, the RMA says its members are owed approximately $251.8 million in unpaid taxes from the oil and gas industry.
In his statement, Jean said his department will be “leading a broad, multi-prong consultation with industry, rural municipalities and landowners this fall to work on solutions to increase reclamation and promote responsible development of legacy oil and gas assets in central and southern Alberta.
“It is time to make progress on the issue of orphan and unreclaimed wells and we intend to do just that.”
The provincial government is also planning to address the issue of unpaid taxes owed to municipalities, he said.
“A very small number of active companies are currently delinquent in their payments, and I have informed the AER and the Rural Municipalities of Alberta that I am open to taking further steps to help correct the issue,” he said.
RMA president McLaughlin says in the past six weeks, two oil and gas companies operating in Alberta that have gone into receivership owe $45 million in unpaid taxes to municipalities.
“That’s a shocking number,” he said.
