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Municipalities respond to calls for spending cuts

Oil and gas property assessment model changes proposed
MVT oil pump sunset
Red Deer County estimates proposed assessment changes for oil and gas properties could cost the county about $4 million in lost revenue. File photo

MOUNTAIN VIEW COUNTY – Rural municipalities are continuing to voice concerns about proposed changes to the assessment model for oil and gas companies – and to respond to recent Canadian Taxpayers Federation (CTF) calls for municipalities to cut spending.

Changes proposed by the provincial government could reduce rural municipal revenue by $291 million in the first year, with some municipalities losing more than 30 per cent of their revenue, said Rural Municipalities of Alberta (RMA) president and Mountain View County councillor Al Kemmere.

Such reductions would lead to spending cuts on infrastructure and services, and could lead to tax increases on businesses and residents, he said.

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

In a recent press release, the CTF called on municipalities to cut spending in response to the proposed changes to the oil and gas assessment model.

“Many of the municipalities threatening tax hikes spend more than the average municipality, which is particularly important for taxpayers given Alberta municipalities are the second highest spenders among Canadian provinces,” said CTF Alberta director Franco Terrazzano. ‘“This also illustrates the potential for spending cuts in these municipalities.”

Although the CTF release did not identify Mountain View County spending, it did so for Red Deer County (RDC).

“RDC estimates proposed assessment change could cost the county about $4 million in lost revenue, resulting in property tax increases of nearly 30 per cent for other properties,” he said.

“But if the county merely brought its spending in line with average Alberta’s mid-sized municipalities, the county would spend $12.7 million less every year.”

In response, the RMA says Alberta rural municipalities have a higher level of responsibility for road and bridge infrastructure, leading to higher costs.

“Accusing Alberta’s rural municipalities of poor financial management using per capita measures is not only inaccurate, it reflects a complete lack of recognition for their role in the province’s past success and future growth,” said Kemmere.

“Rural municipalities have few areas to cut spending, because so much of their budgets go to building and maintaining their massive road and bridge networks, which exist mainly to benefit industry.”

The RMA is calling on CTF to focus on the potential impact the assessment model changes could have on business owners and residents.

The RMA has also called for further dialogue with the province before any changes are made to the oil and gas assessment model.

The province has not announced a date when the proposed changes could come into effect.

Calls to Jason Nixon -- the Rimbey-Rocky Mountain House-Sundre MLA and a cabinet minister -- seeking comment were not immediately returned.