Rural Sask. municipalities lobby for help with unpaid oil and gas taxes

·2 min read

Saskatchewan's small towns are rallying for tougher tools to help them collect taxes from oil and gas companies.

Delegates at the Saskatchewan Association of Rural Municipalities midterm convention on Tuesday urged the provincial government to take a firmer hand as they chase after millions in unpaid taxes from struggling oil companies.

SARM president Ray Orb said dropping oil prices in recent years likely contributed to some companies failing to pay their taxes, leading to rural municipalities' tax concerns.

With West Texas Intermediate recently floating above US$80, some municipalities are looking to pick up their tabs.

SARM members voted Tuesday on a resolution pushing the province to allow municipalities to place liens on oil and gas licences. It passed with 98 per cent support.

The resolution was backed by 46 co-sponsors, who are owed at least $19 million in taxes collectively, RM of Eye Hill administrator Jason Pilat said.

Similar motions passed with wide margins. One called on the province to ensure municipalities are compensated for outstanding taxes.

RM of Cambria administrator Monica Kovach said "it's just not feasible" to collect the money from oil and gas purchasers who won't want taxes cutting into their income.

"We need tax enforcement options sooner, before they get to $19 million of outstanding taxes throughout the province," she said.

Another passed motion called for outright suspending the operating licence of any resource company that fails to keep up with its municipal taxes.

RM of Lacadena Coun. Brock Minogue called it a "simple, straightforward and fair process" that would lift the uncertainty facing municipal budgets and encourage companies to clean up wells.

This isn't the first time SARM members have raised these issues. RMs also passed a motion in 2018 that similarly asked for more tools to collect on unpaid taxes.

This time will be different, Orb said. Alberta recently announced plans to help its municipalities recoup roughly $245 million in unpaid oil and gas taxes.

That may generate momentum for policy changes in Saskatchewan, Orb said.

Another reason is that commercial and agricultural operations may have to make up the difference with rural municipalities that are owed taxes.

"I don't think ranchers and farmers are going to want to pick up the tax bills from these companies," he said.

SARM plans to get a clearer picture of how much is outstanding before raising the issue with Government Relations Minister Don McMorris, Orb said.

Until then, rural municipalities may be left waiting for the province's response.

"I think they're all feeling the pinch," Orb said.

Nick Pearce, Local Journalism Initiative Reporter, The StarPhoenix

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