According to a survey done by Rural Municipalities of Alberta, the amount of unpaid taxes that oil and gas companies owe in our province is up to $173 million, a 114% increase from last year.

Local counties are included in that number, with Ponoka County saying they are owned at least $2 million from oil and gas companies. Some that have since gone under, but there is still some operating within the county who are simply refusing to pay their taxes.

Ponoka County Reeve Paul McLauchlin says he personally thinks it's a tax revolt, because oil and gas companies know that places like Lacombe and Ponoka County have little legal recourse.

“We have no mechanisms because it’s a surface lease on private land. If we used leans and other instruments that are available to us, those would actually burden the underlying landowner, and I think that farmers in rural Alberta having county leans on their property for unpaid taxes from oil and gas surface rates would probably get us in a little bit of trouble. And at the same time, why put that burden on landowners specifically, when the burden should be worn by the oil and gas industry?”

McLauchlin says there is also a lack of transparency between counties, landowners, and the oil and gas companies, which would make it easier to determine who was getting paid what they owed.

“I don’t know if everyone’s getting their land payments as individual landowners. If they are, that’s great, I do know that the surface rates system has been clogged up, and it’s 2-3 years behind. And so if surface rates aren’t being paid to individual landowners as well as to the municipalities, it just creates a double complexity. Landowners have a recourse, as far as we can tell, and there’s been multiple court cases, but we (the County) get pushed back so far back in the line if a company goes into receiverships one thing, but an operating oil and gas company, there’s not a lot of avenues that are available to use right now…we’ve been lobbying to the provincial government to try and find remedies, but as of yet we have not seen any.”

An orphan well site near Carstairs that's in need of reclamation. Photo courtesy of the Government of Alberta.

Lacombe County

Lacombe County meanwhile had to write off around $600,000 worth of uncollectable taxes last year from companies who went under, and they are also reporting some landowners who lease payments are being delayed, or in some cases even being asked to negotiate a decrease in lease payments made to the land owner by the oil and gas companies.

Lacombe County Reeve Paula Law says they plan their budgets with all these tax dollars in mind, so when a company doesn't pay their fair share, the burden falls elsewhere.

“When we get that shortfall, it has to be made up elsewhere, and so it’s going to be made up through taxing the rest of our residents and our businesses and all of that too. That shortfall needs to be picked up, and we’re also still having to pay the education portion of those taxes.”

The education property tax is collected by the County on behalf of the provincial government to help pay for our education system province-wide, and the County is on the hook for any taxes that were not collected, regardless of the reason.

Law says they’ve heard of some landowners who have been asked to reduce or delay lease payments by struggling oil and gas companies.

“We’re also hearing out in the area…these companies are slower in sending their lease payments, or they’re asking for voluntary reduction in payments, I’ve heard of a landowner that went into review and it came back 40% less. I heard of a landowner that has an application before the Surface Rights board, and right now he’s had that application in for 4 years now and it’s still not been resolved.”

Ponoka County Reeve Paul McLauchlin says counties have been lobbying done to the Alberta Energy Regulator (AER), who have mechanisms in place to determine if an oil and gas company has the resources available to manage their sites from start to finish.

“And ultimately I think that a ‘good’ company is paying their municipal taxes and I would really love it if the AER would make it one of their indicators that a good actor and a good player is one that pays their municipal taxes as well, as an important part of the local community. This is only a few bad apples, the fact is the industry is definitely community-driven and for the most part a lot of companies I know are paying their taxes, there’s just some that aren’t and their consistently operating too as well, and they’re doing that consistently across the province as well.”

Some Alberta politicians are taking it a step further, like former Liberal leader David Swann, who announced on Wednesday that he will not pay his provincial taxes until energy companies pay theirs, and he’s encouraging other Albertans to do the same.

Energy companies meanwhile are saying their wells, pipelines, and other facilities are overvalued for tax assessment, and they are asking for the province to cut them a break.