Lacombe County council has rejected an energy company’s request for a tax break.
Calgary-based Lynx Energy Ltd. asked the county to waive $52,570 in 2019 late tax penalties and to give it up to two years to pay $328,568 in taxes owed in 2020.
Lynx Energy president and CEO Allen Bey said the provincial government’s moves to change the way oil and gas assets are taxed will help financially, but those measures will take time to implement.
“I am concerned about our ability to survive until a new, modern and fair assessment model is in place, and so I would ask you and your council to consider a form of short-term bridge relief,” Bey says in his Sept. 28 request.
“This bridge is critical to our survival and will allow Lynx to manage through the current economic downturn that we are experiencing, preserving our company and the jobs we provide.”
Lynx owns and operates six gas plants and 28 compressor stations in central Alberta.
It produces more than 110 million cubic feet of gas through 6,000 wells and 5,000 kilometres of pipelines, and employs about 80 people.
Michael Minchin, the county’s corporate services director, warned council that the municipality has little power to ensure it gets taxes owed through a payment plan.
“We really don’t have any method to enforce the payment, or even the taxes,” Minchin said. “This is really them asking you to finance their operations over the next couple of years.”
Councillors expressed their sympathy for the troubles the oil and gas industry is facing, but were reluctant to single out one company, or sector, over another.
“The biggest concern is we have other industries in the county,” said Coun. Barb Shepherd. “Where does this end?
“I’m sorry, I just have a hard time doing this for one and not everybody. Where do we draw the line?”
Coun. Brenda Knight agreed that many businesses are hurting.
“I know a lot of small businesses that are struggling right now,” she said. “Where does this stop? We have to think about all these folks.”
Coun. John Ireland pointed out that the oil and gas industry has already received tax help from counties, including a reduction in shallow gas well assessments and relief from education taxes.
“We already subsidize them significantly.”
On Tuesday, Red Deer County council approved a tax relief plan for oil and gas companies that would give them more time to pay back taxes if they brought their accounts up to date, and lower penalty charges if they completed their payment plans.
Lacombe County councillors agreed to discuss whether to consider a similar industry-wide relief plan at a future meeting.
If that was to happen, Lynx would likely be eligible to apply.