Alberta municipalities frustrated with bad energy taxpayers

The association said in March that the province’s oil and gas companies owe a total of $253 million in unpaid property taxes to municipalities.

Unfortunately, the law allows a few companies to slip through the cracks and take advantage of the situation.explains Jason Schneider, who is also prefect of the county of Vulcan. It is very frustrating for municipalities. In our opinion, if [une entreprise] cannot pay its taxes, it should not be allowed to operate in Alberta, period.

Serious impacts

These unpaid property taxes cause many headaches for municipalities. For example, Vulcan County had to cut its budget by 30% to avoid passing the bill on to those who pay their taxes diligently, according to its prefect.

Political scientist Keith Brownsey of Mount Royal University in Calgary says it will be difficult for rural communities to get their money back and that these unpaid property taxes are having a significant impact on people in those areas.

Roads are not paved, new water filtration systems are not installed, same thing for new treatment plants, all that. The list is longhe said.

The director of the RMA refuses to point the finger at a particular company, leaving it to each municipality to do so if it wishes.

However, the situation is getting worse every year, according to the annual report of the RMA, the taxes unpaid by these companies were estimated at $173 million in 2019. In two years, this debt has increased by 46%. Director Schneider is confident that this figure will drop significantly in 2022.

Allow time for the new law to take effect

At the end of 2021, the provincial government put in place a new law allowing municipalities to impose liens in order to recover what the oil companies owe them. In particular, the law grants municipalities the right to send their debtors a 120-day notice during which they must pay the debt or reach a payment agreement.

After these 120 days, municipalities can seize the assets of offending companies that are located within their geographical limits.

Recovering the amounts owed could take time, warns a spokesperson for Minister Ric McIver.

Photo: CBC

The energy regulatory agency now requires a study of the company’s financial health before granting it a license to operate in the province.

According to a spokesman for Municipal Affairs Minister Ric McIver, the department expects these changes to take time to show results.

Municipalities are slowly starting to use their new powers to impose liens to encourage companies to pay their property taxessaid Scott Johnson, the minister’s spokesman, in an email.

We are halfway through the first tax year since this law came into force. We continue to monitor the situation and hope that this law and the improvement in our economic situation will lead to positive results.

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