Rural Municipalities of Alberta (RMA) says its members are facing an unpaid oil and gas property tax burden of $253.9 million. As new arrears are added each year, the chance of recovering these unpaid millions is shrinking, and municipalities are calling on the province fix well-known loopholes that let debtor companies off the hook.
In 2024, the unpaid oil and gas property taxes owed to rural municipalities grew by $67.8 million, more than 50 per cent higher than the outstanding taxes owed in 2023, according to a survey of RMA members.
The portion of this debt owed by insolvent companies is now over 60 per cent, leaving municipalities with little choice but to accept their losses and write off the debt.
“When these companies are put up for sale or transferred, there is no opportunity for municipalities to attach that unpaid property tax portion to the resale or to try and get any of the value back,” said RMA President Kara Westerlund.
“There is no mechanism, whether legislation or within the (Alberta Energy Regulator), that allows us to be a creditor.”
The fact that municipalities are powerless to compel tax payment is well known within the oil and gas industry, Westerlund said.
The recent spike in the number of insolvent companies suggests several non-viable companies continued operating, and not paying taxes, in 2023 before going under last year, according to RMA.
The growing issue of insolvency highlights the need for the AER to “adopt a more effective approach to ensure that the oil and gas industry meets its tax obligations to municipalities while still operating,” the RMA said in a its 2024 report on unpaid oil and gas taxes.
Rural municipalities are owed over $100 million by operational companies. Though hundreds of oil and gas companies currently have unpaid property taxes, a handful of bad actors are responsible for a huge portion of the debt. The ten worst offenders owe a combined $67 million, and a single company owes over $27 million to 19 municipalities.
“The attempts in the last several years to put a stop to this type of behaviour in the industry are not working. RMA is willing to work through the solutions. We're willing to come to the table. But enough is enough,” Westerlund said.
Westerlund said RMA is hoping to meet with officials from Municipal Affairs and Energy and Minerals to create a property tax accountability strategy and implement solutions to strengthen enforcement and eliminate the unpaid property tax problem.
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Pay your bloody taxes yo foreign oil companies. Sure don't give a break at the pump. In fact, so far you are keeping the carbon tax. Don't worry, that piece of smith will figure out some way to funnel subsidies to cover it.
Western Wheel
Maybe the people who voted for Smith should hold her responsible! Does she work for the public or her buddies in the oil business?
The Albertan
Maybe Premier Danielle Smith should have given the Municipalities the money she gave the Oil & Gas to clean up the abandoned Wells that they had already been given money from the Federal Government. They shouldn't even have gotten one cent, it should be their responsibility and they should have had to put up a Bond that would have paid for these well clean ups. Governments have the power but they don't want to upset the big Oil & Gas Companies.
Western Wheel
It is infuriating that the oil and gas companies allow themselves to act that way, but municipalities are also partly at fault for waiting until such an outrageous summ has accumulated before sounding the alarm. If anyone of us were to do the same thing with our finances the banks would be in the same situation as the municipalities. Of course it is a huge burden, but don't municipalities have fiscal responsibilities as well to check where the tax status of the companies are and close them down if the bill is not paid? Just an opinion !
Of course! Blame the victim! Makes a lot of sense, doesn’t it?
They have been trying to the Government to get rid of the loop holes for nine years, so I don't think it is the Municipalities that have been causing the problem. If I didn't pay my taxes someone would come and repossess my property and probably throw me in jail as well. Time to get the AER to not be bought and paid for by the oil, gas and coal companies....self regulation doesn't work and never will.
This isn’t the first we’ve heard about it, and the municipalities have no power to “close them down”.
Oil and gas, the richest most destructive industry ever!! and they won't pay to clean up their mess. Way to go Alberta.
Unfortunately our Premier loves oil and gas and really doesn't care much about the rest of the industries in the province. As for municipalities remember the UCP gave themselves the power to just come in and fire the elected municipal officials for perceived wrongdoing. Now they have offloaded a huge amount of education tax collecting to the municipalities as well, meanwhile the oil companies that do not pay their taxes walk away laughing!!
Western Wheel
Funny how if the public did not pay their taxes the government would be knock at your door.
Maybe we all should try it?