Red Deer County welcomed new legislation to help municipalities recoup unpaid property taxes they are owed by energy companies.
According to Rural Municipalities Alberta, those unpaid taxes now total $245 million — about half of which is from companies still operating.
Mayor Jim Wood said Red Deer County has $6.2 million in outstanding taxes.
“It’s never good to foreclose on anyone for not paying their taxes. But the key thing is we have a tool now. It’s going to start to help level out the playing field so everyone is paying their taxes and we don’t have some slipping through the cracks,” Wood said.
Until 2019, municipalities were able to issue special liens on the assets of delinquent companies. That year, a court ruled such liens didn’t apply to the oil patch.
Related:
Province tables bill to help municipalities recoup unpaid oil and gas property taxes
Wood said $6.2 million is significant for Red Deer County, but it would be well over $11 million if the county had not developed a monthly payment plan for energy companies.
“I believe there is a lot of goodwill out there to pay if they can. The plan we’ve come up with has helped.”
Details from the province are still forthcoming, but hopefully, the county will not need to rely so much on the legislative amendments now that many companies are becoming more profitable as commodity prices increase, he said.
“I wish all these companies well,” Wood said.
Michael Minchin, corporate services director with Lacombe County, said his county had $1.3 million in outstanding oil and gas taxes in 2020, and about half involved active companies.
He said Thursday’s announcement by the province was a nice surprise because it was something the municipality has been lobbying for over the last couple of years.
“This new special lien power will certainly be a step in the right direction. We’re really curious to see the details. In the short term, we’re not sure we’ll see any immediate gains. But over the long term, we hope we’ll start to see better payment of taxes from oil and gas,” Minchin said.
Related:
Energy companies that owe property taxes should not get new licences: Red Deer County mayor
NDP municipal affairs critic Joe Ceci said the issue of unpaid municipal taxes by oil and gas companies is one that has been growing over the past few years and the UCP failed to act until it reached a crisis situation.
“Due to this delay, it may now be impossible for many of these municipalities to recoup some of the taxes that are owed to them - taxes that are used to build and maintain infrastructure for residents, support local economies and create jobs,” said Ceci in a statement.
He said all the UCP have done is introduce legislation that returns to an ineffective approach from the past while putting the burden and costs of enforcement on municipalities.
“In fact, the administration and implementation costs for these municipalities might not be worth the recovered costs, which means municipalities are no further ahead.”
He said the legislation still lacks the necessary incentives to get companies to pay. Municipal leaders have been calling for the Alberta Energy Regulator (AER) to prohibit licences from being granted to bad actors.
The NDP also wants more transparency regarding which companies have not paid their taxes by granting the AER the authority to publish this list.
— with files from The Canadian Press
szielinski@reddeeradvocate.com
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