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Energy company requests County waive over $20,000 in penalties

Pine Cliff Energy has unpaid tax bill of over $175,000
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The County of Wetaskiwin approved an oil and gas company’s request to forgive penalties on unpaid taxes. The decision was made at the Sept. 10 general council meeting.

The issue was listed on the agenda as Penalty Cancellation Request – Pine Cliff Energy Ltd and was presented to council by Rene Boutin, Director of Assessment.

“On August 16, 2019 the County of Wetaskiwin received a letter from Pine Cliff Energy Ltd. requesting Council to forgive the upcoming September 1st and January 1st penalties estimated at $23,564.14 due to the decline in the economy over the past years,” stated Boutin’s memo to council.

“Currently Pine Cliff owns nine properties within the County of Wetaskiwin with a total outstanding balance of $175,589.77. The outstanding balance represents the 2019 tax levy only, there were no taxes unpaid from previous years.

“Pine Cliff is proposing to pay monthly installments of $14,632.48 beginning August 2019 and ending July 2020.

“An alternative option for payment of taxes in the County of Wetaskiwin is the Tax Installment Payment Plan (TIPPs), the plan runs January to December and a monthly payment is directly withdrawn once a month.

“The payment is derived by dividing the tax levy by 12, thus avoiding the late penalties. If joined part way through the year, the applicant must make up any “missed” payments. For example, if joined in April, the payments for January, February and March will need to be made up.

“Pine Cliff would need to pay $131,692.32 to cover January to September in order to enter the agreement in October 2019.” Boutin noted the Municipal Government Act gives council the authority to waive penalties or the tax bill itself, and noted Pine Cliff’s tax bill was mostly linear, wells and equipment.

Boutin also pointed out penalties are an incentive for ratepayers or companies to pay their taxes on time; if the penalty is waived, in effect the incentive is eliminated too.

Councilor Kathy Rooyakkers predicted this is the beginning of a trend. “We’re going to see more and more of this,” said Rooyakkers, who also noted that in the ongoing economic malaise, some municipalities are forgiving part or all of tax penalties.

Councilor Bill Krahn asked if there was a risk of the company just walking away from the tax bill. County CAO Rod Hawken said there is that risk, as collecting taxes like Pine Cliff’s is a different process than a private ratepayer, but there is also the risk of setting a precedent.

Hawken also pointed out that when the mad cow problem hit in the early 2000’s, councilors made concessions to help the farm industry.

Councilor Dale Woitt said nobody should be rewarded for not paying their taxes. He also said the provincial government should increase the power of municipalities to collect unpaid taxes from companies.

Councilors discussed cutting the penalty in half, from 7 per cent to 3.5 per cent, They ultimately agreed to eliminate the penalty completely for Pine Cliff due to the bad economic situation.

Stu.salkeld@pipestoneflyer.ca