Things are looking good in Alberta’s oil patch. After some very tough years activity has bounced back, as has the price of a barrel of crude. But the current level of prosperity doesn’t always filter down to the communities where the industry is focused.
According to a report published earlier this month by the Rural Municipalities of Alberta (RMA) approximately $268 million in property taxes owed to rural municipalities by oil and gas companies has gone unpaid. That number represents a 6.1 percent increase from amounts reported for the 2021 tax year, and a 231.5 percent increase from the 2018 tax year, which was the first year that the RMA collected such data.
While some of that amount is owned by companies that are no longer in operation, a significant portion is attributed to companies that are still active in Alberta.
“Given the success of the industry and the wealth it has generated, I am shocked that I still have to discuss this issue, and that rural municipalities and rural property owners continue to be forced to subsidize an industry in a massive boom period,” said RMA President Paul McLauchlin in a media release. “While oil and gas revenues flow to government as royalties or out of the province to shareholders, industry and the provincial government assume rural municipalities can magically maintain service levels even as they face an average shortfall of nearly $4 million due to non-payment of taxes.”
Brazeau County is among the municipalities impacted by the non-payment, although not to the extent suffered by some others. At the last county council meeting director of Corporate Services Colin Swap estimated the County was owed “a couple of hundred thousand,” in unpaid taxes.
Earlier this week the provincial government issued a ministerial order under the Responsible Energy Development Act, requiring the Alberta Energy Regulator to receive proof that municipal taxes have been paid prior to granting licence transfers or new licences. Companies will have to confirm either that their unpaid municipal taxes across the province do not exceed the maximum threshold allowed or that they have a repayment agreement in place. The actual level of the maximum threshold has not yet been determined.
