Proposed provincial legislative amendments may help the County of Grande Prairie in collecting overdue taxes from oil and gas properties.
The County of Grande Prairie told the News that non-titled oilfield companies currently owe over $2 million to the municipality.
“The proposed legislation changes are a step in the right direction so that municipalities can become secured creditors and at least try to seize some of the assets so that they can recoup some of the back taxes they are owed,” said Leanne Beaupre, county reeve.
In February, a survey of 69 members of the Rural Municipalities of Alberta found that approximately $245 million in property taxes is owed to rural municipalities by oil and gas companies. This represents a 42 per cent increase from 2020, according to the province.
The province says approximately “40 to 60 per cent of unpaid taxes are the responsibility of companies that continue to operate in Alberta, while the remainder faces insolvency.”
“I would say that 95 per cent of the oil and gas companies that operate in the County of Grande Prairie and the greater region are very good corporate citizens,” said Beaupre.
She noted that the county is partners with industry.
“We realize that they (industry) need every opportunity to be able to be successful in our area, and if they're successful, then the municipality is successful as well.”
“It's that five per cent … that are creating this discussion and a lot of the issues.”
Still, she concedes there’s room for improvement.
Beaupre said that she would like to see more considerations made by the Alberta Energy Regulator (AER) or the province when it gives a company a permit to allow work in another municipality when it hasn’t paid its taxes in another municipality.
“It would be beneficial; I think to both the government and the municipalities if once a year AER was to check to see whether all of the permits that they have approved if the operators of those permits are in compliance with municipalities,” said Beaupre.
“It really puts the onus back on industry to make sure that they file a letter of compliance to the AER saying that, you know, they're in good standing where they have a compliance certificate from the municipality in which they operate.”
A related issue, she adds, is the toll the industry exacts on local infrastructure.
At an approximate cost of approximately $1 million to build and grade 2.5 kilometres of gravel road, municipalities are left to grapple with rising costs. Beaupre said the county recently looked at a roadway that is seeing over 500 vehicle movements a day, much of which was industry traffic. According to county policy, that road should be paved.
“The outstanding taxes from industry would basically go a long way to paving that road.”
If the provincial amendment is passed, it will restore a special lien that municipalities can use to require oil and gas companies to pay overdue property taxes. It will give the county a tool to seize the property to cover the outstanding debt.
“We're just looking for a clear path forward to be able to collect our what's owed to the municipalities so that we could, in turn, invest that into roads and bridges and access for industry to be able to for them to operate daily,” said Beaupre.
“Rural municipalities across the province have struggled to collect property taxes assessed from a small minority of oil and gas companies in recent years, leading to impacts on municipal service delivery and infrastructure investment,” said Paul McLauchlin, president of Rural Municipalities of Alberta.
Jesse Boily, Local Journalism Initiative Reporter, Town & Country News