Despite the energy industry’s rebound, Red Deer County expects to write off nearly $1 million in unpaid oil and gas taxes this year.
Mayor Jim Wood said the county is not giving up on its efforts to lobby the provincial government to do the “right thing”.
“And the right thing right now is to, in fact, see that the oil and gas holiday that’s been given to these oil companies revoked.
“We would sure like to see that now they are making millions and millions of dollars and giving back to their shareholders they are in fact paying the appropriate property taxes.”
Wood said the county helps maintain the roads and other services energy industry companies use.
“And when they’re given a holiday by not paying their taxes that has to be made up by the other residents of our community — and that’s not fair.”
At the end of 2021, the county had about $6 million in linear taxes — mostly oil and gas pipelines and facilities — on the books.
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County writes off $1.4 million in unpaid oil taxes
The county introduced a payment plan in 2020, which has had some success, to make it easier for companies to pay off their back taxes.
County corporate services director Heather Surkan told council on Tuesday that a potential $1.4 million tax write-off in the 2023 budget has been reduced to just under $1 million by working with companies.
Rural Municipalities of Alberta (RMA) polled its members it found last March they were owed $253 million in unpaid oil and gas taxes.
In 2021, the provincial government created legislation to restore the ability of municipalities to go after the assets of oil and gas companies that have not paid their taxes while putting municipalities first in line for funds from asset sales of bankrupt companies.
Surkan said that the county has been working with a lawyer to see how it can take advantage of the measures in place to recoup taxes.
It has proven difficult. “The tools they have provided us are not necessarily effective right now,” she told council.
Wood said the county continues to work with the province to find ways to help municipalities get the money they are owed and budgeting on the premise that there will be outstanding taxes.
“We are making sure that we’re budgeting for those non-payments so it’s no shock to us later that they might not pay us.
“It’s not a great situation that we’re not collecting. I think that’s the important thing the public needs to understand, that we are doing everything we can to collect those dollars.
“We do not want anybody in Red Deer County to have a tax holiday, just because they don’t want to pay.”
The issue came up at the RMA’s fall conference earlier this month in Edmonton and municipalities with an oil and gas industry presence feel the same way about the issue.
“Rural Alberta wants to see that the oil industry pays their fair share of taxes.”