Richard Froese
South Peace News
Big Lakes County is pleased it will longer have to deal with unpaid taxes from oil and gas companies that has been a problem for several years.
The provincial government issued a directive to the Alberta Energy Regulator (AER) to require oil and gas companies to pay taxes owed to municipalities, says a government news release dated March 20.
Reeve Robert Nygaard says the County is delighted by the directive.
“Since 2016, Big Lakes has dealt with unpaid taxes from oil and gas companies, which has affected our municipality’s overall taxes and put a lot of administrative effort into collecting those taxes,” Nygaard says.
“Big Lakes is very pleased with the government’s new ministerial order, which states that the AER will now require proof of full payment of municipal property taxes prior to issuing a new licence to a company or allowing a company to sell or purchase existing licences.”
The County continues to work with oil and gas companies to ensure property taxes are paid.
“We believe that effective communication is the best approach to resolving issues,” Nygaard says.
“Therefore, Big Lakes will continue to communicate with our ratepayers to provide the best payment plan options to overcome barriers that they need to pay their taxes.”
Municipal Affairs Minister Rebecca Schulz says the government is committed to ensure municipalities receive taxes from energy companies.
“Our government is serious about addressing the ongoing problem of unpaid municipal taxes,” Schulz says.
“This problem has lingered on for far too long.
“While some viable companies have started to pay their back taxes, others are still not getting the message.
“The directive to the Alberta Energy Regulator will have real consequences for those delinquent companies.
“In Alberta, we pay what we owe and it’s time to pay up.”
Energy Minister Pete Guthrie issued a ministerial order under the Responsible Energy Development Act to require the AER to receive evidence that municipal taxes have been paid when approving licence transfers or new licences.
The ministries of Energy and Municipal Affairs worked together on the directive.
Oil and gas companies now have to confirm their unpaid municipal taxes across the province do not exceed the maximum threshold allowed or that they have a repayment plan in place whenever they apply for new licences or for licence transfers because they’re seeking to sell their assets.
The measure will help reduce unpaid taxes and reassure municipalities and Albertans that companies are financially healthy and able to meet their tax obligations.
Rural Municipalities of Alberta president Paul McLauchlin says the directive is long-overdue and is greatly appreciated.
“The RMA is pleased to see the province taking action to hold oil and gas companies accountable for paying property taxes,” McLauchlin says.
“Although only a small number of companies avoid their property tax payment obligations, this issue has had major impacts on rural municipalities across Alberta.
“As 41 per cent of unpaid taxes are owed by companies that are currently operating, we are optimistic that this change will have an immediate positive impact in rural Alberta.
“We look forward to working with the AER and relevant ministries to determine how our members can support the AER in enforcing the new requirement.”
Under Alberta’s liability management framework, launched in 2020, the AER revised its licence eligibility requirements to include a more holistic assessment of a company’’s financial health that is applied through the life cycle of an asset.
The new directive strengthens the AER’s approach by making payment of municipal taxes a necessary and mandatory condition for approval, based on available data.