Alberta’s government recently announced the results of the Assessment Model Review (AMR). When the review began we had four scenarios proposed.
The four scenarios could have cost municipalities anywhere from 7 to 20 per cent of their tax revenue. Municipalities in central and southeast Alberta would have been amongst the hardest hit.
When Minister Tracy Allard was sworn into Municipal Affairs in August, her first decision was to hit pause on the review to do more consultations.
I fully supported this decision as I knew our government needed a better understanding of our municipalities’ concerns, while striking the balance of keeping the oil and gas industry viable in our province.
Minister Allard hit the road as soon as she got into the position and met with over 300 municipalities across the province, including a very well attended meeting here in Drumheller – Stettler, where over 17 municipalities had the opportunity to discuss the impact AMR has on their viability.
On top of meeting with the Rural Municipalities Association and the Alberta Urban Municipalities Association, Minister Allard also met with the Canadian Association of Petroleum Producers, Explorers and Producers Association of Canada, the Canadian Energy Pipelines Association, the Canadian Property Tax Association and the Alberta Assessors Association.
In my opinion, the need for balance has been clear from the get go. We had to keep in mind how the assessment changes would impact education taxes, municipal funding agreements, inter-municipal collaboration frameworks, police, seniors and recreation funding, and most importantly our residential taxpayers.
We also needed to ensure that these changes did not do damage to business and the energy industry.
The energy industry and municipalities have a mutually dependant relationship on each other. Municipalities need a strong oil and gas industry to create jobs for you.
The energy industry needs municipalities to create a community so you can live, raise a family and enjoy a healthy quality of life. In Alberta, municipalities also provide safe roads and bridges for oil and gas workers to get to their work sites.
The balanced decision will attract new investment, create more jobs, grow the economy and create more revenue for our municipal partners by broadening their assessment base.
To help our industry partners, no property taxes will be charged on new wells and pipelines for the first three years to kick-start investment for our energy industry. Alberta’s government will also eliminate the well drilling equipment tax (WDET).
Eliminating the WDET will encourage industry to drill more wells and create more jobs within our communities.
In addition, to keep the less productive oil and gas fields viable across the province, we will lower their assessment.
These measures will provide much-needed certainty to investors, municipal governments and local taxpayers.
I have had discussions with the leadership of every rural municipal government in our riding. They are relieved to have some certainty going forward. While assessment changes will still have a very real impact on their bottom line, they believe it is a good compromise. They look forward to continued discussions with the Minister over the next three years.
The AMR decision demonstrates the benefit of working in collaborate partnership with industry and municipal leaders. Working together is the reason RMA, CAPP and EPAC all stood on stage to support the AMR announcement.
Alberta unfortunately is in some historically tough times. I hear stories everyday of insolvencies, desperation and families in distress. While there is rocky road ahead of us, there is a light at the end of the tunnel. Alberta’s government is focused on igniting the economy, creating jobs and keeping our province open. Take care of those around you and please continue to be responsible during this difficult time.
Nate Horner
Drumheller-Stettler