Uncollected property taxes on oil and gas properties leaves County of Stettler grappling for options

Uncollected property taxes on oil and gas properties leaves County of Stettler grappling for options

County’s New Year’s resolution: ‘revitalizing oil fields’

By Jessica Jones

For the Independent

The County of Stettler has resolved to revitalize oil fields for the New Year as uncollected property taxes on oil and gas properties have peaked over $120,000, as more companies go into receivership or bankruptcy.

At the County of Stettler’s Dec. 11th regular council meeting, councillors heard that, from 2015 to 2019, the municipality has not received payments from various companies totalling $120,297.80.

In 2019 alone the uncollected taxes reached $94,416.

“Uncollectible property taxes definitely affect our budgeting process,” said Niki Thorsteinsson, County of Settler director of communications.

“It reduces our expected income, it reduces our operating budget,” she said, further noting that there isn’t much the County can do, other than raise taxes or reduce service levels.

“It’s a difficult decision that council faces during these tough economic times.”

In the attempt to lighten the blow, council voted 5-1 (Councillor Dave Grover opposed) to apply to the Province of Alberta for the Provincial Education Requisition Credit (PERC) for the uncollected property taxes in order to reclaim a portion.

“Each year in October we look at taxes we were unable to collect,” Thorsteinsson explained.

“We research what might be going on with the company that did not pay their taxes and we must hypothesize if we think this is a temporary issue or if this might be a long-term issue.

“If our income is unknown it becomes difficult to budget … so we budget for the worst case scenario, but of course hope for the best,” she said.

While the County of Stettler council grappled with unpaid oil and gas property taxes during its Dec. 11th meeting, it also had to weigh and balance a request from an oilfield ratepayer to wave 2019 property tax late penalties totalling $1,580.86.

Brain Carnahan, senior VP, Asset Operations for Primrose Drilling Ventures LTD, documented in a letter to council that the, “Oil and gas industry has been struggling with low commodity prices and other challenges,” and that his company is in the, “Process of catching up.”

There was a lot of discussion from councillors, explained Thorsteinsson, but council decided in the end to not forgive the penalty, not wanting to set a precedent.

Thorsteinsson acknowledged that the struggles these companies face have a trickle-down effect, impacting businesses, families, the County, and ratepayers.

“It’s like a circle,” she said.

“We fully appreciate the financial difficulties faced by many industries in Alberta. And when they hurt, we hurt.”