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Initiative to address unpaid oil and gas industry taxes applauded

Mountain View County Reeve Angela Aalbers said more needs to be done to address the issue of money owed to rural landowners under lease agreements with oil and gas companies
MVT oil pump sunset
According to Rural Municipalities of Alberta, $268 million in unpaid taxes is owed to municipalities by oil and gas companies. File photo

MOUNTAIN VIEW COUNTY - A new provincial initiative aimed at getting oil and gas companies to come up with the millions of dollars in unpaid taxes they owe to rural municipalities is welcome, says Mountain View County Reeve Angela Aalbers.

The minister of Energy and the minister of Municipal Affairs announced last week that the government is issuing a directive to the Alberta Energy Regulator (AER) to require companies with tax arrears to pay up before new licence transfers or new licences are issued.

The plan will only move forward after the province and the AER come up with so-called maximum thresholds on the amount owed by each company. No timeline for the thresholds to set has been announced.

According to Rural Municipalities of Alberta (RMA), $268 million in unpaid taxes is owed to municipalities by oil and gas companies. 

As of last week, Mountain View County was owed $104,441, down from $647,522 owed at the start of the year, officials said.

“Mountain View County is very pleased to learn of the Alberta government’s ministerial order requiring the AER to address unpaid oil and gas property taxes owed to municipalities prior to issuing a new licence to a company or to allow a company to sell or purchase existing licences,” Aalbers told the Albertan.

“This is an item that we have specifically lobbied to the ministry for a number of years. The county continues to maintain the position that if energy companies do not have sufficient financial resources to pay for their existing tax obligations, they pose an unreasonable financial risk to all Albertans and as such, should not be granted any further licenses or approvals from the AER.

“This is a positive announcement for Mountain View County that will ensure that tax obligations are fulfilled by the energy company incurring them, and not by Mountain View County ratepayers.”

The AER oversees oil and gas development in the province.

Although the new directive to the AER will require unpaid taxes to be paid before new licence transfers or new licences are approved, the amount the company owes will have to exceed a maximum threshold before the company is required to pay.

“Companies will now have to confirm that their unpaid municipal taxes across the province do not exceed the maximum threshold allowed or that they have a repayment agreement in place whenever they apply for new licences or for licence transfers because they are seeking to sell their assets,” Minister of Energy Pete Guthrie said in a release.

Gabrielle Symbalisty, press secretary for Guthrie, told the Albertan that work is underway to set the thresholds but a time for their release has not been determined.

“Our office, along with Municipal Affairs and the AER, is working to develop the thresholds based on analysis on the current licensee information,” she said. “I don’t have a specific date on that but we are working to determine that as soon as possible. As soon as that has been decided we will let everybody know.”

Paul McLauchlin, president of the 69-member RMA, said he was pleased with efforts to make companies paid what they owe.

“This action represents major progress in holding accountable the small number of oil and gas companies that operate without paying taxes,” he said.

Joe Ceci, NDP municipal affairs critic, said, “This directive only addresses part of Alberta’s growing oil and gas liabilities and exposes Danielle Smith’s hypocrisy on the issue. The government could withhold licenses to incentivize the cleanup of wells. Instead Smith wants to give away $20 billion in Albertans’ money to delinquent companies for something they are already obliged to do.”

Meanwhile in a related matter, McLauchlin called on the province to do more to ensure companies are paying rural landowners what they are owed under surface leases for oil and gas wells located on private land.

“In many cases, those affected are small family farms or acreages that use surface lease revenue to supplement their agricultural income or to support their retirement,” McLauchlin said. 

“We know that this is also a widespread problem, but it is mainly the responsibility of the same small group of bad actors that are ignoring their property tax payment obligations.”

Reeve Aalbers said more needs to be done to address the issue of money owed to rural landowners under lease agreements.

“While the county is appreciative of the government’s efforts on property tax accountability, we are hopeful the province will continue to pressure industry to help our rural landowners enforce contractual obligations,” said Aalbers.

“Issues like on-time surface lease payments for oil and gas wells located on private property, and timely reclamation of disturbed sites continues to need attention.”


Dan Singleton

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