Kneehill County council formally threw in the towel on trying to collect about $5 million in unpaid property taxes and other debts owed by a defunct oil and gas company.
The decision was made at the Jan. 24 regular meeting of council.
Council read a report about Trident Exploration, a Calgary-based energy company that went into receivership in 2019, and the municipality’s efforts to recover about $5 million in debts owed by the company to Kneehill ratepayers.
It was noted Trident Exploration owed Kneehill County unpaid property taxes from 2019 to 2022, including penalties and legal costs, that added up to just under $5 million.
Property Tax Clerk Caroline Siverson presented the report to council, noting the defunct Trident Exploration still had assets that could have been applied to the debt, but the appointed receiver recently dashed those hopes so councillors needed to make a decision about the uncollectable debt..
“Trident Exploration had a receiver appointed in May 2019 to handle the closing of Trident’s business affairs and to sell off any and all assets that they were able,” stated Siverson in her report to council.
“This was completed in early 2022 and many of Trident’s assets within Kneehill County borders were sold to other companies that continue to do business in the County.
“All assets sold have had the Trident portion of taxes previously cancelled by council and Provincial Education Requisition Credit (PERC) dollars applied for and received.
“Once the receiver sold (Trident’s) valuable assets, they disclaimed the balance. This means that they were handed over to the Orphan Well Association (OWA) for reclamation.
“Once this was completed, there were funds left over and our legal firm prepared a brief to the court requesting that municipalities receive a share of these funds for tax arrears prior to the balance being handed over to the Alberta Energy Regulator (AER).
“The court provided a decision in late 2022 which advised that municipalities were not eligible to receive any of the funds. The court brief decision is included as an attachment to this report.”
Siverson noted some of Trident’s assets handed over to the OWA continue to accrue a tax bill.
Reeve Jerry Wittstock asked Siverson to elaborate on the roughly $52,000 a year Kneehill will charge for ongoing property taxes.
Siverson responded although former Trident Exploration assets are now under the control of the OWA, some were and continue to be assessed and Kneehill County is bound to send out tax bills for properties that are on the assessment roll.
Coun. Faye McGhee noted she had recently been contacted by a farmer who was in turn contacted by a small oil and gas company which apparently wanted to obtain some of Trident Exploration’s former assets before they were transferred into the care of the OWA. McGhee asked how that would affect Kneehill County.
Siverson acknowledged it’s apparently possible that assets could be purchased before they’re handed over to the OWA but noted some of those assets, such as oil and gas wells, may no longer be producing. As well, some of those assets may have an existing property tax bill owing to Kneehill County.
Siverson noted the unpaid property tax bill may be passed along to the new owner and she stressed that it’s up to prospective owners to do their research on assets they’re interested in buying because there may be an unpaid tax bill associated with the property. She noted that it seems many purchasers don’t think about that detail.
Councillors unanimously passed a resolution to write off just under $5 million in debts owed by Trident Exploration.
“It’s unfortunate, but we don’t have a choice,” added the reeve.
Stu Salkeld
Local Journalism Initiative reporter
ECA Review
