Deadbeat fossils’ unpaid tax bills to rural municipalities in Alberta now total $253 million, prompting Municipal Affairs Minister Ric McIver to admit that legislation to get the problem under control didn’t go far enough.
With oil prices surging, there are “no excuses” for the companies not to pay their bills, McIver told a legislative committee earlier this week.
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“What we all thought would work, hasn’t yet,” he said. “So we’re going to try something else.”
The problem of fossil companies’ unpaid debts to small rural municipalities “has ballooned during the last three years,” CBC reports. “Last year, the legislature passed a bill that restored municipalities’ ability to place special liens on property owned by oil and gas companies that didn’t pay their taxes,” forcing them to either pay up or agree to repayment plans.
But a survey by the Rural Municipalities of Alberta still found that unpaid taxes due from fossil companies increased 3.3% last year, in communities that rely on them for up to 60 to 90% of the local tax base. That left the municipalities scrambling to “find extra cash, cut expenses, or lay off employees to balance their budgets,” ultimately leaving rural taxpayers to “shell out more money for fewer services,” CBC says.
“They’re causing undue harm and distress to rural Albertans,” said RMA President Paul McLauchlin. He told CBC the funding shortages are forcing communities to delay road and bridge repairs and other infrastructure projects the companies themselves depend on to conduct business.
If nothing changes, “Alberta is going to end up with insolvent municipalities,” CBC writes. But “some of the corporations in arrears are hard to track down—a few are numbered companies based in the Cayman Islands.”
McLauchlin added there are steps the Alberta Energy Regulator could take to address the problem if the provincial government had the will to take action. A good start would be for the AER to rely on municipal data on companies’ tax status rather than trusting them to self-report, and bar them from operating or transferring resources if they haven’t paid.
“In its simplicity, it’s frustrating,” he told CBC. “Really, the tool is there.”
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