The Rural Municipalities of Alberta (RMA) dropped a bombshell on Tuesday.
According to RMA, approximately $268 million in property taxes is currently owed to rural municipalities by oil and gas companies. This according to the organization is an increase of 231.5% since it began collecting data regarding unpaid taxes by oil and gas companies in 2018.
RMA President Paul McLauchlin, said that he was shocked to be discussing this issue. "Rural municipalities and rural property owners continue to be forced to subsidize an industry in a massive boom period.
"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," McLauchlin added.
Alberta's Minister of Municipal Affairs Rebecca Schulz said in a press release agrees with RMA about the issue, "(The Provincial Government) agree with the RMA’s assessment that the problem of unpaid oil and gas taxes to rural municipalities is unacceptable. We are consulting with industry, municipalities, and landowners as we actively explore options to ensure taxes are paid as a condition of license transfer."
The Minister added, "While the problem of unpaid oil and gas taxes persists for many Alberta municipalities, we have recently seen payment plans established from 25 companies for municipalities to receive approximately $48 million in owed taxes. Our government will provide support as needed to municipalities as they create payment plans to recover unpaid taxes where possible."
RMA says that payment of property taxes is a matter of survival for many rural municipalities. It could result in many municipalities, according to RMA, having no choice but to reduce service levels, increase tax rates on other property owners, and even lay off staff.
McLauchlin said property taxes are not collected for fun but to better the community in which these companies reside in, "(Property Taxes) pay for the construction and maintenance of roads and bridges for the oil and gas industry to access resources, as well as to provide everything from water to waste collection to recreation and many other services to rural residents, many of whom work in the oil and gas industry. Ignoring property taxes doesn’t just hurt the municipality, it hurts rural communities and places an unfair burden on other rural businesses and residents.”
He added that industries be held accountable, and that the Alberta Energy Regulator (AER), along with the Government of Alberta ensure oil and gas companies act in the public interest, "Rural municipalities are not looking for the AER to collect taxes on their behalf or get involved in local disputes over tax rates or payments. They are simply asking for the industry to be held accountable to meet their legal obligations, which include paying property taxes to support the costs of the public infrastructure and services they are more than happy to utilize. This is a reasonable request with a straightforward solution. All that seems to be lacking is the political will.”