A pair of oil companies unsuccessfully sought tax breaks from Lacombe County recently.
It was not the first time in the past couple of years that companies have come looking for financial help — and it won’t be the last, predicts Reeve Paula Law.
“I expect we’re going to see more requests. We saw some requests last year and the previous year.
“There’s a good chance we’re going to see more.”
Law said county council has been consistent in not approving tax relief, leery of setting a precedent, among other issues.
“We understand these are tight times, that these are tough times,” said Law.
“But once you start doing that, where do you say ‘yes’ and where do you say ‘no?’ That’s our biggest difficulty with it.
“Every industry has a downturn throughout their business cycles.”
In Lacombe County, AlphaBow Energy Ltd. submitted a proposal to pay off the $146,250 owed this year by the end of August in taxes in stages.
About $44,000 would be paid off initially. The company asked that the remainder, as well as any tax penalties, be deferred until the province has completed its review of assessments and a related court challenge is dealt with.
A second company, New North Resources Ltd., proposed paying off its $62,233 tax bill in installments over the next six months and that late payment penalties be waived.
Law said all municipalities faced with unpaid tax bills by oil and gas companies are concerned about the situation.
“We build our budgets the year in advance based on what we’ve projected we’re going to receive. So, it is very concerning.”
In response to the lingering oil and gas industry downturn, the province has been looking at ways to help out companies.
In June, the Alberta government unveiled a proposal to 15 municipalities that would see tax bills for shallow gas well producers slashed by 35 per cent. The province offered to offset municipal revenue losses this year, but no guarantee was offered for next year.
The plan raised alarm bells in a number of rural municipalities, which stand to lose hundreds of thousands — in some cases, millions — of dollars in tax revenue.
pcowley@reddeeradvocate.com
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