MOUNTAIN VIEW COUNTY – Unless changes are made to update the provincial assessment model for oil and gas properties, companies and rural communities alike will be negatively impacted going forward, says the Explorers and Producers Association of Canada.
Rural municipalities, including Mountain View and Red Deer counties, say changes being contemplated by the Kenney government could force large service cuts and tax increases on rural residents and business.
Four options being considered by Municipal Affairs are a seven per cent assessment decrease, a nine per cent assessment decrease, a 14 per cent assessment decrease, and a 20 per cent assessment decrease.
Under any of the four scenarios many rural municipalities would see marked declines in tax revenues from oil and gas companies.
For example, under the 20 per cent option, Mountain View County would see a decline in tax revenue of more than $7 million, and nine per cent assessment decrease would cost Red Deer County $4.4 million a year.
No final decision has been made on the matter of changes to the assessment model, says Jason Nixon, Rimbey-Rocky Mountain House-Sundre MLA and Kenney cabinet minister.
The current rural municipal tax assessment model does not reflect the economic reality of oil and gas companies, and in particular the impacts of the volatility of commodity prices, says EPAC president Tristan Goodman.
“Alberta’s municipal tax system has not been updated in over two decades and the status quo is simply unsustainable for Alberta oil and gas businesses,” said Goodman.
“If changes to government taxation are not made to reflect our new reality, Albertans in rural communities will lose jobs at a time when we can least afford it (and) will also directly threaten the longterm sustainability and viability of some local communities.”
The EPAC represents 170 companies, managing $150 billion in assets.
The assessment model changes contemplated by the provincial government could lead to massive tax increase or service level reductions to residents and business owners, say Red Deer County Mayor Jim Wood.
“This is an unfair download onto the taxpayers of rural Alberta,” said Wood. “There are better ways to make our oil and gas industry competitive. There are ways through policy direction that do not create such a terrible burden on the rural residents and business of this province.”
Al Kemmere, Mountain View County councillor and president of the Rural Municipalities of Alberta, says more dialogue is needed by stakeholders to address concerns with the proposed assessment model changes.
The RMA represents 69 rural municipalities, including Red Deer and Mountain View counties.