In March, the provincial government announced it would close loopholes that have allowed oil and gas companies to stiff rural municipalities for more than $250 million in unpaid property taxes. To do so, the government created the Property Tax Accountability Strategy working group in partnership with the Rural Municipalities of Alberta (RMA).
Kara Westerlund, president of RMA, said “not much has changed” since then.
Slow progress
“It’s still happening as we speak. We started tracking this issue seven years ago. Everybody knows it’s a problem but nobody has taken the leadership to solve it,” Westerlund told TheRockies.Life in an interview. “It really makes me wonder if the provincial government is listening and taking us seriously.”
So far, the working group’s purpose and structures have been defined, said Westerlund.
She hopes the group, which includes Municipal Affairs and several affected associations, will come up with legislative and regulatory changes as soon as possible.
First and foremost would be giving municipalities the tools to collect unpaid taxes. Equally important is empowering the AER to give the boot to bad actors that keep pumping oil and gas from Alberta while cheating on taxes and leaving behind toxic wells.
Silence from the Ministry
Despite this being a well documented and well known problem, nothing substantive has been done to fix it.
In May, Dan Williams became Alberta’s new Minister of Municipal Affairs. Westerlund said it’s been “crickets” on the file since Williams was sworn in.
“That’s very frustrating for our members,” Westerlund said.
She regularly uses the analogy of homeowners who fail to pay their taxes and lose their property. She’s getting tired of using it.
“Currently there is no legislation or regulations that allows us to do that to oil and gas companies that fail to pay their taxes,” Westerlund said.
Westlock in a bind
Most rural Albertan towns aren’t exactly flush with cash. Every property tax dollar counts. Taxes keep the lights on at the community centre, patch potholes, and upgrade a town’s sewer infrastructure.
So when oil and gas companies don’t pay their tax bill, it hurts. Westlock County, 50 kilometres north of Edmonton, is one of dozens of municipalities across Alberta that have been stiffed by companies claiming to be insolvent or bankrupt.
Recently Westlock County council voted to write-off $570,881 in uncollected taxes owed by five companies classified as “doubtful accounts.”
That means the chances of collecting what’s owed from these companies is low.
Currently oil and gas companies are responsible for almost half of the $2.3 million in unpaid taxes on Westlock’s books.
This puts municipalities in a bind. Civic leaders are wary of passing more of the tax burden onto regular hardworking homeowners, but also need a solid tax base.
This year, taxable property assessments in Westlock were up more than 10 percent. This jump, combined with a rise in provincial school tax, equaled a property tax increase.
That’s why Westlock council voted to take a bit of the sting off with a five percent decrease in its mill rate for residential and non-residential property taxes.
In a press release, Westlock County Reeve Christine Wiese said council had inflation pressure in mind when it approved the property tax cut.
“In a time when many costs are rising, Council wanted to do our part to ease the pressure on residents and businesses,” she said. “Lowering the property tax rate supports affordability, strengthens our regional competitiveness, and helps attract and retain investment.”
“No place in our province”
But the bills at municipal halls across rural Alberta still have to get paid.
Kara Westerlund estimates that $100 million of the total $250 million, and counting, in unpaid municipal taxes are from companies that are still operating, churning a profit, and making some people rich.
That’s like salt on the wound.
She said that the RMA isn’t picking a fight with the entire oil and gas sector, and that a handful of bad actors have created this problem.
“Enough is enough. Alberta is built on hard working people and I love my home. But these companies have no place in our country and in our province,” she said.
