Taxes from energy companies are trickling in slower than usual in Red Deer County.
There are $8.4 million worth of outstanding taxes — $1.6 million of it linear taxes for pipelines, power lines and similar infrastructure — according to a budget update provided to county council on Tuesday.
About $2 million more in taxes are outstanding than this time last year, said Heather Gray-Surkan, county corporate services director.
“It is a bit of a concern, for sure,” said Gray-Surkan of the outstanding energy taxes. The county is working with oilpatch firms to bring the tax accounts up to date.
Coun. Philip Massier said uncollected taxes can be a big problem for municipalities because the money collected as school taxes must be passed on to the province whether or not it has been received yet.
“The $8 million (in total taxes owed) frightens me a lot,” said Massier.
Mayor Jim Wood believes the tax shortfall is a “sign of the times.”
While it’s always a concern when taxes aren’t paid on time, the county is in good financial shape and easily able to absorb tardy tax payments, and write-offs if it comes to that, said Wood.
As well, the county is able to undertake all of its spending plans even if some taxpayers default.
Should a tax-owing company wind up in bankruptcy the municipality is first on the list of creditors to be paid out, he said.
Wood does not believe it is time to ring the alarm. While taxes are coming in slower than usual from some quarters the money may come in later.
Meanwhile, the county will be watching closely and make final adjustments, if necessary, later in the year.
Uncollectible school taxes have been an issue of concern for municipalities for some time. In its spring Alberta Association of Municipal Districts and Counties convention, a resolution was proposed urging the province to broaden the powers of municipalities to collect linear taxes. Also, the province was asked to provide a credit to municipalities that are out of pocket because of uncollectible school taxes.