Alarmed by proposed energy industry tax breaks, the County of Stettler is calling on its ratepayers to join the chorus of opposition.
The county has estimated the Alberta government’s plan to ease the tax burden on oil and gas companies will cost the municipality between $3 million and $4 million in the first year alone.
“For the County of Stettler to recoup a loss of this magnitude, drastic cuts to services, extreme tax increases and service fee escalations would all have to be considered,” says the county in a statement.
Reeve Larry Clarke says the company fully supports the oil and gas industry and welcomes a review of the current tax regime.
“But the proposed solution does not match the problem,” says Clarke.
“Large oil and gas companies are set to benefit from the four scenarios presented, with no guarantee money will be reinvested in Alberta.
“Struggling small to mid-sized oil and gas companies — the ones that live, work and support our communities — may actually see tax increases if any of these proposals are pushed through.”
Last year, the County of Stettler wrote off $4.5 million in bad debts, mainly from the oil and gas industry. Another $2.7 million has already been written off so far this year.
The county also criticized the lack of consultation with municipalities by the province and the over-representation of industry on the government’s review panel.
“We urge all of our residents, ratepayers, partners and businesses and neighbouring communities to speak out about the proposed changes,” says Clarke, who suggested contacting Premier Jason Kenney and Drumheller-Stettler MLA Nate Horner.
“It will affect every one of us.”
Lacombe County also painted a grim picture of how the tax changes would affect the municipality. The hit on the county’s budget would range from $900,000 to just under $2 million, depending on which of the four tax scenarios the province chooses.
Municipalities have already had to absorb new policing costs, reduced grant funding and COVID-19-related property tax deferrals. There is no money left in reserves to make up further financial losses, says Reeve Paula Law.
Law also questions whether the tax breaks will help others besides the biggest oil and gas players.
The reeve says “smaller, locally owned companies will benefit less from the revised assessment model, and many may face significant assessment increases.
“This puts them at a competitive disadvantage with larger, international companies who have absolutely no obligation to reinvest those savings in Alberta.”
Municipalities have no room to absorb new taxation, she adds.
“While we could cover the cost by reducing staffing and services, there is no benefit to our residents: they would be paying the same and receiving less.”