Lacombe County is joining other rural municipalities across the province in voicing their concerns about potential new property tax assessment models for oil and gas companies, fearing that a tax break for them would mean a massive increase in taxes for residents, along with substantial decreases in services.

The proposed changes would give oil and gas companies a break on municipal property taxes so they are able to continue operating and employing Albertans.

Lacombe County Reeve Paula Law says between the drop in oil prices and COVID-19, it's not just oil and gas companies who are feeling the hit.

“With everything being thrown into the mix, it’s tough, and we know that it’s tough for oil companies and energy companies on this, but it’s also getting tougher for everybody involved… the trickledown effect, the service companies, it’s all of the businesses, it’s the residential, it’s the municipalities. It’s tough all the way around.”  

Law says the most extreme of these scenarios, the one that oil and gas companies apparently favour the most according to the Rural Municipalities of Alberta, could potentially increase their residential mill rate by up to 39%, according to their numbers from 2018.

Law says they are very opposed to these changes, saying that they have to make a budget for three years, which will be difficult to do when they were only given a one year snapshot of these new proposed changes.

“If the economy turns around, that would be great, it would be great for everybody, but we don’t know when that’s going to happen… with the information that we’ve gotten, it looks like it’s only going to really benefit the larger, few energy companies. The small and middle ones, it does not look like it’s going to be a benefit for them.”

The province wants to hear back from municipalities no later than the end of this month about how they feel about these proposed changes.

The four different scenarios presented by the Government of Alberta last week are the result of a year-long, government-led review about how to provide relief for struggling oil and gas companies in Alberta.

Law says these new proposals would also not address the large amount of unpaid taxes owed by oil and gas companies to different municipalities, with Lacombe County alone still seeking up to $173M in unpaid taxes for 2019.

Instead, it would just further add to the problems municipalities face in regards to collecting tax revenue from energy companies within their region.

The following outlines the potential financial impacts on Lacombe County based on these four scenarios proposed by the Alerta Government:

“The information we have received from the Rural Municipalities of Alberta (RMA) indicates that there is no data or information, from either industry or the Province, that links the proposed assessment reductions with enhancing Alberta’s oil and gas company’s competitiveness,” said Reeve Law. “Further, smaller, locally owned companies will benefit less from the revised assessment model, and many may face significant assessment increases. This puts them at a competitive disadvantage with larger, international companies who have absolutely no obligation to reinvest those savings in Alberta.”

More information on the proposed changes can be found by clicking the links below: