The County of Wetaskiwin denied a request to reduce property taxes related to an unpaid tax bill during their regular council meeting Dec. 10.
A letter was received from energy company Loyal Energy (Canada) Ltd. asking the county to reduce the tax rate the company is required to pay.
“Loyal Energy (Canada) Operating Ltd was incorporated under the laws of Alberta on April 9,2018 and began oil and gas operations in Alberta in February 2019,” stated the company’s letter, signed by Brad Johnson, VP of Operations, and dated Nov. 26, 2019.
“In the continued low commodity price environment Loyal Energy has made a concerted effort to control and reduce all costs including G&A and operating expenses.
“As we start our operations, we find the amount of taxes payable to municipalities punitive to the profitability of the Loyal Energy’s operations and request a reduction in property taxes for, at the least, the initial year. We understand that the date for appeals for has passed.
“We request any suggestions you may have on how to proceed to get a reduction in the amount of taxes payable.” Johnson also explained in the letter the company needs 60 days from notice to settle accounts.
A staff memo in the council agenda package stated one penalty on the unpaid taxes could be waived, but the balance is due.
“Correspondence from Loyal Energy (Canada) Operating Ltd was received on November 29, 2019 requesting tax relief from their outstanding linear taxes as they find ‘the amount of taxes payable to municipalities punitive to the productivity of the Loyal Energy’s operations,’” stated the memo.
“On September 25, 2019 the County of Wetaskiwin created a new linear account for Loyal Energy (Canada) Operating Ltd. On October 3, 2019 a 2019 Tax/Assessment Notice was mailed to Loyal Energy.
“The September 1st 6% penalty was excluded from the notice due to the timing of the new account creation. The 2019 levy and current amount outstanding is $34,278.99.
“There will be a 7% penalty applied to the property if the taxes are not paid by December 31st, however due to the resolution passed by Council on September 10, 2019, this penalty will be removed if the taxes are paid by July 31, 2020.”
Councilors unanimously denied Loyal Energy’s request for a tax reduction, noting this would set a precedent regarding cancellation of property taxes.