(File photo by The Canadian Press/Jeff McIntosh)

By Sheldon Spackman

Compounding Concerns

Lacombe County concerned about unpaid oil and gas property taxes

Mar 22, 2021 | 4:58 PM

Officials with Lacombe County are sounding the alarm over the growing issue of unpaid property taxes from oil and gas companies and its ongoing impact to residents.

Reeve Paula Law describes the situation affecting all of Alberta as compounding.

“Right now we’re sitting at over $1.3 million of unpaid taxes and over $611,000 of that are companies that are still out there working. They’re still viable. Over $700,000 is with either bankrupt or insolvent companies. So we’ve got companies out there that are still working, they’re still out there, and they’re just choosing not to pay their taxes,” she laments.

“Lacombe County for years has worked with these companies, and the property owners have worked with these companies, and they’re not paying their taxes. That’s part of our budget and when they don’t pay their taxes, we have to make up that shortfall somehow and it would have to go on to property owners. So it’s either going to have to be an increase in taxes or it’s going to have to be a cut to services.”

Law acknowledges the difficulties the industry has faced over the last several years, but notes it’s been tough for ratepayers as well.

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“It’s not only the down price in oil, but it’s also COVID. Everybody is hurting. If they don’t pay it, there’s nothing we can hang it to. We have no recourse to get this money back.”

Law has a message for these companies.

“We’ve worked with you over the years, the landowners have worked with you over the years, yes, there’s been some really good years, yes, there’s been some tough years, but everybody has those,” she suggests. “These property taxes – it’s part of doing business. We would like these taxes paid.”

Recently, the Rural Municipalities of Alberta (RMA) provided member municipalities with the results of a survey they conducted on unpaid oil and gas property taxes borne by rural municipalities in the province. According to Lacombe County officials, the survey results indicate that rural municipalities face an overall unpaid oil and gas property tax burden of $245.7 million, with still-operating oil and gas companies responsible for 57 per cent of the unpaid taxes.

Though the RMA and its members have continually advocated the Government of Alberta to address the legislative and policy loopholes that allow oil and gas companies to forego paying property taxes, no action has been taken by the Province to address the ongoing and growing issue, according to County officials.

In Lacombe County, the impacts of this issue alone could force a 2 per cent increase in County property tax rates in order to recover lost annual oil and gas tax revenues without reducing service levels.

On Mar. 11, Lacombe County council agreed to schedule a meeting with Minister of Environment and Parks, Jason Nixon, as well as with MLA Ron Orr to talk about the issue. These efforts are also in addition to writing the Minister of Municipal Affairs and Minister of Energy, and the Alberta Energy Regulator.