Rural Municipalities of Alberta is launching a campaign to highlight how provincial government policies are hitting communities' finances.
"Over the past three years, provincial policy changes and inaction have stripped municipalities of $332 million in vital municipal tax revenue," says RMA, which represents 69 counties and municipal districts.
"These policies, some of which were initially introduced to offset the impacts of the pandemic and reduce costs for the oil and gas industry, have left rural communities struggling to maintain essential infrastructure and services."
The six-week Below the Drill campaign will highlight different government policies and the impact they are having on rural municipalities. As the campaign comes to a close, the RMA will issue a report that will show the accumulated impact of various tax policies on municipalities' bottom lines.
"Reduction in municipal revenues are of significant concern for RMA as municipalities have limited abilities to general their own revenue and provincial government grants are declining," says the RMA.
"Rural municipalities require sustainable and sufficient revenue to fund their operations and capital projects, such as constructing and maintaining the roads and bridges that provide access to Alberta's oil and gas resources.
"Unpredictable changes in this funding, including GOA (Government of Alberta) policies that reduce municipal revenue, create significant financial uncertainty for rural municipalities."
RMA president Paul McLauchlin said rural municipalities maintain huge road, bridge, water and wastewater networks that benefit the energy industry "yet we've been forced to bear the financial brunt of policy decisions to subsidize the oil and gas sector.
"We understand the importance of supporting the industry, but these policies seem to be designed solely to cut costs for oil and gas companies, without consideration of how they may erode the very communities that help drive Alberta's economy.
"This is not just about taxes – it's about the long-term viability of rural Alberta."
Among the policies that will be highlighted are the decisions to dump a well drilling equipment tax and to continue a holiday on assessment for newly drilled wells.
The three-year property tax holiday on all new wells and pipelines began in 2022 and is to expire this tax year. The province has said the well drilling equipment tax will not return.
The RMA also intends to highlight the ongoing financial strain municipalities are under because of unpaid energy industry taxes. RMA members reported nearly $252 million in taxes was outstanding at the beginning of this year. What especially irks many municipal leaders is that the taxes are owed in many cases by companies that continue to operate.
A 35 per cent assessment reduction for shallow gas wells was in place for the 2021, 2022 and 2023 tax years, further reducing municipal tax revenues.
