Rural municipalities in Alberta say they’re onboard with a provincial decision to suspend property taxes for three years for companies drilling new oil and gas wells or building new pipelines, after initially raising the alarm about the government’s plan to revamp the whole tax regime in fossils’ favour.
“The measures reflect an effort on the part of the province to achieve what the head of the Rural Municipalities of Alberta, Al Kemmere, called a fair balance between supporting the energy sector and keeping rural counties fiscally viable,” CBC reports.
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“RMA looks forward to working with the Government of Alberta and industry in the coming years to ensure that rural municipalities can address their viability and continue to do their part to support industry competitiveness in a way that reflects a strong partnership,” Kemmere said.
“Alberta needs to be as competitive as possible to attract investment into our communities,” Municipal Affairs Minister Tracy Allard said in a release. “We know our municipal partners are committed to do their part to create jobs and support Albertans through this challenging economic time. We are working to secure a brighter future for our province by supporting both industry and communities.”
CBC says Alberta is also lifting its tax on well drilling equipment, reducing its tax assessments on wells that are considered less productive, and extending its 35% assessment reduction on shallow gas wells for three years.
CBC recalls the rural communities’ alarm in 2019 when the province proposed a new tax model that would cost them C$20 million per year in lost revenue, on top of the strain of trying to make up for deadbeat fossils’ unpaid property tax bills.
Last week, Allard said she was postponing a decision on the tax revamp. “While we of course want our oil and gas businesses to be strong and viable so they can invest, create jobs, and pay taxes in our municipalities, we must also carefully consider the impact a reduction in assessment would have on the municipalities these employers operate in,” her press secretary, Justin Marshall, said in a statement.
But as of last week, the fossil lobby was still pushing for a quicker decision. “We still strongly recommend that the government proceed with a decision on reforming the assessment system this year,” said CAPP’s vice president of oilsands and fiscal policy, Ben Brunnen. “There will really never be a better time to do it.”
The Canadian Press notes the latest announcements still leave the fossil companies’ massive unpaid tax bills unaddressed. “The unpaid taxes is our No. 1 concern,” Kemmere said last week. “It has got some of our member municipalities on the cusp of not being able to pay their bills.”
The fossils’ tax liabilities “have more than doubled to $173 million since last year,” The Canadian Press writes. “Industry says the way taxes are assessed is driving companies out of business. Properties are assessed by the provincial government, which evaluates them on replacement cost and not on market value.”
