Province reviews oil and gas assessment

Proposals favor large oil and gas – have devastating effect on rural municipalities

On Aug. 4th, representatives from the County of Stettler, Municipal District of Provost, Paintearth County, Special Areas Board, Starland County, and representatives from the Rural Municipalities of Alberta (RMA) met with Nate Horner, MLA for Drumheller-Stettler, to lobby against the proposed changes to oil and gas assessment announced by the Province of Alberta.

On July 30th, council members and administration attended a protest of the proposed changes at the Alberta Legislature.

Proposed assessment changes would reduce property taxes for large oil and gas companies (assets over $500 million), shifting the tax burden from industry to county residents, commercial properties, and local businesses.

“Four assessment scenarios proposed by the Province would result in a very significant tax revenue loss for our County, ranging from $3 million to $4 million in the first year,” noted a release.

“For the County of Stettler to recoup a loss of this magnitude, drastic cuts to services, extreme tax increases, and service fee escalations would all have to be considered. Support traditionally given to local municipalities, recreation facilities, and community groups would all be in jeopardy.

Proposed assessment changes will impact every ratepayers, residents, and businesses within our County.

“The County of Stettler fully supports the oil and gas industry and a review,” said County of Stettler Reeve, Larry Clarke.

“But the proposed solution does not match the problem. Large oil and gas companies are set to benefit from the four scenarios presented with no guarantees money will be reinvested in Alberta,” he said.

”Struggling small to mid-sized oil and gas companies – the ones that live, work and support our communities, may actually see tax increases if any of these proposals are pushed through. The four scenarios being considered would be disastrous for our communities and for our rural way of life.”

Every rural municipality in the province will be impacted by these changes, the majority will be left with the same severe impacts, budget struggles and questions of continued viability.

The County of Stettler wrote off $4.5 million last year in bad debts, mainly from oil and gas, according to the release.

So far in 2020, the County has written off another $2.7 million.

“We asked the Minister of Municipal Affairs to assist us over a year ago, when suddenly our ability to collect on bad debts from oil and gas was taken away – and we gave them possible solutions. We have still received no solution or assistance from our government, and yet they are chipping – or digging – away at County revenue’s further, not actually assisting the companies struggling to survive. To put things in perspective, this proposal gives oil and gas companies with $500 million in assets a tax cut on the backs of a rural municipality with an operating budget of $24 million.”

The County of Stettler strongly objects to the lack of consultation with affected municipalities, and with the review process undertaken by the Province, which included members of the Canadian Association of Petroleum Producers (CAPP) being present on the review committee.

“Inviting industry to the table to lead a review on taxation is a very slippery slope. Will our government next be inviting utility companies and urban developers to lead review on urban taxation?

“While all stakeholders deserve and have the right to equal and accessible consultation, CAPP only represents four per cent of oil and gas industry in Alberta. So it seems disproportionate that a special interest group was provided the opportunity to lead a government review process, and even present one of the four scenarios?

“We urge all of our residents, ratepayers, partners, businesses and neighboring communities to speak out about the proposed changes. It will effect every one of us. This decision is set to be made in the next few weeks—and then it will be virtually impossible to reverse,” added Clarke.

These tax changes are set to be pushed through via ‘regulation’, which means there would be no debate.

“County of Stettler Council will continue to engage with the Province and work with the RMA (Rural Municipalities of Alberta) to advocate on your behalf.”

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