Rural municipalities continue to wait on the edge of their seats for the Alberta government’s decision regarding changes to the province’s oil and gas assessment model.
Municipal leaders were made aware last month that the United Conservative government, after meeting with Rural Municipalities of Alberta (RMA) and Alberta Urban Municipalities Association (AUMA), is proposing changes to the oil and gas linear assessment model to help out struggling O&G companies.
Linear assessment covers wells, pipelines, and machinery and equipment models. Between April and July of 2020, the provincial government conducted a review of the assessment model, which hasn’t been updated in about 15 years. The province is proposing four sets of changes to the model, and the intent was to modernize things for oil and gas companies to enhance industry competitiveness while still ensuring municipal viability.
However, many rural municipalities are voicing their concerns over the proposed changes, saying the tax breaks for oil and gas companies would be disastrous to their municipal budgets. Many counties are already owed millions of dollars in unpaid taxes from oil and gas. Counties are arguing that an increased reduction in oil and gas property tax revenue would be detrimental and dramatically impact municipal budgets. This would mean an increase in taxes and a reduction in services to offset costs.
Lac Ste. Anne County calls the proposal a “crippling blow” to rural Albertans. The County is quite upset that municipal leaders were not involved in the review and that information is embargoed until the province gives its decision on which model it is choosing.
Lac Ste. Anne County Deputy Reeve, Nick Gelych says it “hurts” that they weren’t more involved in the conversations that lead to the proposed scenarios. The county’s municipal leaders are hoping more information can be shared and conversations had before a final decision is made.
Mayerthorpe Mayor Janet Jabush says a solution should be in everyone’s favour.
Jabush sat down with Deputy Reeve Gelych, Onoway Mayor Judy Tracy, and Bernie Poulin, the Chair of the Association of Summer Villages in Lac Ste. Anne County on Monday to discuss the topic.
Gelych says if any of the four proposed scenarios were to go ahead by the province, Lac Ste. Anne County will have to review everything in their budget and possibly cut or reduce services.
In a statement on their website regarding the proposal, the County says depending on the scenario, the changes will reduce the overall assessed value of oil and gas property in rural Alberta by between $8.9 billion and $26.7 billion. The County says that would result in rural municipalities losing a combined total of between $108.7 million and $291.2 million in property tax revenue in the first year. Rate hikes for residential taxes would increase between 19 percent and 28 percent, while non-residential would see increases of between 17 percent and 25 percent for 2020 to offset those costs.
The County is asking concerned residents to write or phone the Minister of Municipal Affairs Kaycee Madu, or Lac Ste. Anne-Parkland MLA Shane Getson. The County says it will also continue to lobby the government to get more information before a final decision on the proposal is made.