Unpaid Oil & Gas Taxes – Key Messages

Jocelyn GagnonAnnouncements, Archived, Current

The Rural Municipalities of Alberta (RMA) recently conducted a survey of its 69 members on the ongoing issue of unpaid oil and gas taxes.  The data shows that throughout the province $253.7 million dollars are owed to Alberta municipalities from Oil & Gas companies.  While we are one of the more fortunate municipalities in the province because of the companies we deal with within our municipality, and the amount owed is relatively low, this still becomes a burden that is borne by our remaining ratepayers in some way.  We are sharing with you some information on how this may affect the County and subsequently you, our ratepayers, in the future if there is no resolution of this ongoing issue:

  • Municipalities across the province rely on property taxes to fund the services and infrastructure that the oil and gas industry utilizes daily.  Northern Sunrise County manages 1,158 kilometres of roads and 98 bridges.  Without consistent payment of property taxes, we may have no choice but to reduce service levels or close some roads and bridges.
  • Municipalities have no choice but to recover every dollar not paid in property taxes by the oil and gas industry from other property taxes in the form of increased tax rates or reduced service levels.  In our municipality, we would be forced to raise the residential property tax by 0.65 (up to 5.65) and the non-residential property tax by 1.69 (up to 14.69) to recover lost oil and gas tax revenues without reducing service levels.
  • Municipalities are required to collect education property taxes, which they then forward to the Government of Alberta to contribute to Alberta’s education system.  Municipalities must forward a set amount based on property assessment regardless of whether they are able to actually collect taxes.  Our municipality has forwarded $106,062 in education property taxes to the province that we have been unable to collect from oil and gas companies in 2021. We will continue to work with these companies to receive payment.
  • In cases when oil and gas companies approach us to inform us of their challenges in paying property taxes, we are often willing to work with them on flexible payment agreements.  In 2020 and 2021 the County has provided a rebate to ratepayers if taxes are paid in full by the annual due date of June 30.