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County writes off $427,937 in bad oilfield debt

Supreme Court ruling said to have hampered county's ability to collect
MVT oil pump jacks
Mountain View County wrote off $427,937 in bad debt from five companies. They include Trident Energy, Camino Industries Inc., Scollard Energy Ltd., Sequoia Resources Corp., and Terra Energy Corporation. File photo/MVP Staff

MOUNTAIN VIEW COUNTY – County councillors have approved the writeoff of oilfield bad debt accounts totalling $426,937.

The move came by way of motion during the recent regularly scheduled council meeting.

The writeoffs relate to five companies and the total includes tax levies of $353,978 and penalties of $72,963.

Trident Energy is by far the largest debtor on the list, with a balanced owed of $418,566, including $71,272 in penalties.

The other four companies are Camino Industries Inc., Scollard Energy Ltd., Sequoia Resources Corp., and Terra Energy Corporation.

The companies are listed on the Alberta Energy Regulator debtor registry in addition to having a status of insolvent, bankrupt or in receivership.

“While we optimistically follow for ownership updates for not orphaned non-linear parcels, these five linear accounts are uncollectable with no remaining avenues of collection,” Robert Beaupertuis, director of corporate services, said in a briefing note to council.

“The likelihood of us getting any of the linear tax is not there.”

A recent court ruling has also negatively impacted the county’s ability to collect, he said.

“The Supreme Court of Canada ruling issued previously this year that ‘after going bankrupt, an oil and gas company has to fulfill provincial environmental obligations before paying anyone it owes money to’ has further hindered collection of linear taxes,” he said.

“Other precedent setting court decisions which have adversely affected municipalities’ ability to collect linear taxes was for linear taxes owing to be placed with all other unsecured creditors.”

Regarding the budget implications of the debt cancellation, he said: “By writing off these tax accounts the bad debt expense would be realized and the allowance for doubtful accounts and taxes receivable would be reduced by the same amount of $426,937.

“Following cancellation of taxes an application will then be made for the PERC (provincial education requisition credit) for the education portion of the listed oilfield bad debt rolls which totals $55,358.”

Coun. Angela Albers said she believes it’s important that the county be able to access the PERC funds.

“I support the writeoff,” said Aalbers.

Coun. Al Kemmere said, “I understand that we want to get a piece of the PERC pie.”

Coun. Dwayne Fulton was not present for the vote.

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