The County of Wetaskiwin is addressing unpaid oil and gas taxes and asking the Government of Alberta to implement more requirements for new well drilling applications. Over the last six years, the County of Wetaskiwin has accumulated $3,219,343 in unpaid oil and gas taxes.
Municipalities have no choice but to recover every dollar not paid in property taxes by the oil and gas industry from other property taxpayers in the form of increased tax rates or reduced service levels. The County says that over the last few years they have tried to delay an increase in taxes or decrease in service levels by spending from reserves, reducing capital projects and by finding greater organizational efficiencies.
“While you may assume these are all bankrupt companies that is simply not the case,” says Reeve Josh Bishop. “Some of these companies continue to drill new wells elsewhere in the province while neglecting their responsibilities in municipal taxes. On top of this we can no longer collect drilling fees on new wells.”
Municipalities including the County of Wetaskiwin are required to collect education property taxes which they can then forward to the Government of Alberta to contribute to Alberta’s education system. Municipalities must forward a set amount based on property assessment regardless of whether they are able to actually collect taxes.
In the last six years the County has forwarded $363,413 to the provincial government in education property taxes that the County was unable to collect from oil and gas companies.
The County has recently written off $1,980,343.36 in unpaid oil and gas taxes in order to access provincial relief.
“We call on the provincial government to implement requirements for all new well drilling applications to ensure municipal taxes are paid for existing wells prior to any new approvals,” says Bishop.
The County does say that in cases where oil and gas companies approach them with their challenges regarding paying property taxes that the County is willing to work with them on flexible payment agreements.