The provincial government’s recent announcement that it was setting aside, at least temporarily, plans to markedly reduce assessments on oil and gas company operations has been greeted with some enthusiasm by municipalities and industry representatives.
Whether the government’s alternate short-term plan to help the companies by cutting less deeply into rural municipal tax revenues will be enough to keep the vital oil and gas industry afloat remains anyone’s guess.
What is known is that unless long-term solutions are found that allows rural municipalities to bring in enough tax revenue to cover the cost of the road network infrastructure needed to make those operations possible there will be big trouble ahead.
The provincial government has put aside proposed changes that would have seen oil and gas assessments reduced by as much as 20 per cent, which if implemented would have cost rural municipalities many millions of dollars.
Such losses would, in turn, have forced many rural municipalities to make deep cuts to services and hike taxes on residents and businesses.
Instead the government is giving companies an exemption from property taxes for three years when drilling new wells and building new pipelines, and eliminating the well drilling equipment tax.
Tracy Allard, minister of Municipal Affairs, says the government will be developing a “plan for longer-term reviews of the regulated assessment system” and will be consulting stakeholders as part of that process.
Al Kemmere, president of the Rural Municipalities of Alberta (RMA), says the rural municipalities must have long-term solutions that will allow them to remain financially viable.
“RMA looks forward to working with the government of Alberta and industry in the coming years to ensure that rural municipalities can address their viability and continue to do their part to support industry competitiveness in a way that reflects a strong partnership,” said Kemmere, a Mountain View County councillor.
Hopefully the Jason Kenney UCP government will keep its promise to find long-term solutions rural municipalities such as Mountain View and Red Deer counties can actually live with.
Dan Singleton is an editor with The Albertan.