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Mountain View County collects $543,081 in unpaid industry taxes

More than $268 million in unpaid taxes owed to rural municipalities, says RMA
MVT sunset rig
File photo/MVP Staff

MOUNTAIN VIEW COUNTY - In the past two months, Mountain View County has been able to reduce the amount of unpaid oil and gas taxes owed to the municipality by more than half a millions dollars, says chief administrative officer Jeff Holmes.

The Rural Municipalities of Alberta (RMA) released a survey last week indicating that as of Dec. 31, 2022, approximately $268 million in property taxes was owed to rural municipalities by oil and gas companies, representing a 6.1 per cent increase from amounts reported last year and a 231.5 per cent increase from 2018.

“Mountain View County participated in the most recent RMA survey and at the time of the survey (end of January 2023) we had  $647,522.80 in outstanding taxes owed by the oil and gas sector,” Holmes told the Albertan. “Since the survey was completed county staff have worked diligently to reduce the outstanding tax amounts.  

“We have leveraged our ability to file concerns with the AER (Alberta Energy Regulator) and where possible, we have withheld municipal approvals and services for companies operating in the county despite delinquent tax accounts. We have successfully reduced the current outstanding tax liability to $104,441.”

The RMA represents 69 rural municipalities, including Mountain View and Red Deer counties.

In releasing the survey RMA president Pau McLauchlin said, “While oil and gas revenues flow to government as royalties or out of the province to shareholders, industry and the provincial government assume rural municipalities can magically maintain service levels even as they face an average shortfall of nearly $4 million due to non-payment of taxes.”

In response to an Albertan request for comment following the release of the RMA survey, Jay Averill, spokesperson for the Canada Association of Petroleum Producers (CAPP), provided a statement.

“CAPP unequivocally agrees that all companies should be paying their taxes and fees to municipalities,” said Averill. “Rural municipalities are where the oil and natural gas industry operates and where people in the industry work and live. 

“CAPP also acknowledges that we continue to see the lagging effects of a multi-year downturn for the oil and gas sector with many related insolvencies having a long-term impact on the municipal system.”

The association is committed to continuing to work with the province’s liability management system and municipalities to “ensure Alberta remains a place where the industry and the economy can continue to thrive for years to come,” Averill said.

CAPP member companies have operations across central Alberta, including in Mountain View, Red Deer and Clearwater counties.

Following the release of the RMA survey, Minister of Municipal Affairs Rebecca Schulz said, “We agree with the RMA’s assessment that the problem of unpaid oil and gas taxes to rural municipalities is unacceptable.

“We are consulting with industry, municipalities, and landowners as we actively explore options to ensure taxes and are paid as a condition of license transfer.”

Official opposition NDP energy critic Kathleen Ganley says the Smith government must address the unpaid tax situation before giving companies royalty relief on well reclamation.

“The lack of action from the UCP on unpaid taxes leads to higher costs for Albertans who are forced to fill the gap,” said Ganley. “Danielle Smith’s $20 billion giveaway to these companies will lead to even more companies walking away from their responsibilities and higher costs for Albertans in the middle of an affordability crisis.”

Since 2015, Mountain View County has written off more than $1.6 million in unpaid oil and gas taxes.

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