MOUNTAIN VIEW COUNTY - Rural municipalities are glad that the provincial government is planning further consultations regarding plans to reduce assessments on shallow gas properties in 2020, says Al Kemmere.
A Mountain View County councillor and president of the Rural Municipalities of Alberta (RMA) Association, Kemmere says stakeholder input from counties and others is vital to ensuring the process succeeds.
"While rural municipalities are concerned about their 2020 and future budgets, given the 35 per cent shallow gas assessment reduction combined with the phasing in of costs brought on by the new police funding model, the RMA truly appreciates the government of Alberta's decision to engage us further in consultations so we balance industry competitiveness with municipal viability," said Kemmere.
The RMA represents 69 rural municipalities, including Mountain View and Red Deer counties.
The province government recently announced that the assessment would be lowered starting in the new year. Many of the shallow gas operations in the province are centered in west central Alberta.
"As companies continue to battle low commodity prices and unnecessary federal policies, the planned assessment reductions mirror similar assistance provided in 2019, and will support industry while government completes its review of property tax assessment for the oil and gas sector," said Kaycee Madu, minister of municipal affairs.
"Our government recognizes that many of Alberta's shallow gas producers are continuing to struggle because of market conditions and high operating expenses, including property taxes based on outdated models. Until the new assessment models can be implemented, we are providing a 35 per cent property assessment reduction on shallow gas assets for the 2020 tax year.”
Dale Nally, associate minister of natural gas added, “Our government has implemented a number of actions that provided much-needed, short-term relief for Alberta’s natural gas producers, and we are now shifting our focus to the long term.
“Providing the same property assessment reduction in 2020 as in 2019 will allow us to work with industry to fix Alberta’s assessment model, without having to rush the process.”
Government says it will continue to consult with municipalities and industry as it changes the model used to determine the value of assessments, particularly for oil and gas properties.
Changes are expected to come into effect in 2021.
“We are pleased with the province’s approach to reviewing municipal assessment. Alberta has historically assessed our industry at a higher level relative to other jurisdictions, which means higher taxes and fewer jobs,” said Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers.
“The province’s relief for shallow gas assets and its leadership in ensuring the 2020 assessment review does not adversely impact industry competitiveness sends a critical signal to the investment community that Alberta is open for business.”
Tristan Goodman, president of the Explorers and Producers Association of Canada, added, “It is very reassuring that the government is taking a little more time to get this assessment review right. Competitiveness on all costs is key for investment and we look forward to contributing to the process in the new year.”
About 70,000 wells and associated pipelines in Alberta meet the criteria for the assessment reduction, the government says.