Oil and gas assessment could triple ratepayer taxes

Kneehill County council heard some stark possibilities at their Aug. 18 regular meeting, possibilities linked to a provincial government proposal councillors say will shift tax burden away from multinational corporations and onto Alberta taxpayers.

Councillors heard a report about the United Conservative Party (UCP) government’s oil and gas assessment review currently ongoing. 

County Chief Administrative Officer Mike Haugen gave a blunt summary of the assessment review and its possible effects on ratepayers.

“During (the assessment) review, municipalities were not consulted and the resulting information has not been shared by the province and remains under a communications embargo,” stated Haugen in his report to council.

“Since that time, the province has worked primarily with industry to generate four possible scenarios for changes to the oil and gas assessment models. 

Of the scenarios proposed, Kneehill County stands to lose between $3.5 and $7.3 million per year. To put that in perspective, all residential and farm taxes in the county amount to approximately $2.8 million per year.”

Haugen stated analysis of the four options suggests multi-national corporations have the most to gain, while small to medium sized companies and Alberta citizens in general will be told to pick up the slack.

“Based on the Government of Alberta’s proposed scenarios, the largest oil and gas companies operating in the province will receive a disproportionate share of benefits from changes to the assessment model,” stated the CAO. 

“Small and locally-owned companies will, on average, receive significantly less benefit and in many cases will face significant assessment increases.

“If Kneehill County were to lose $7.3 million in revenue (option D), the County could increase residential and farmland taxes by 40 per cent and business taxes by 44 per cent and would still face a loss of over $1 million dollars. 

If the County wanted to recoup the losses completely, taxes would have to increase almost 50 per cent for all residents, farms, and businesses within the County. 

If the County were to recoup this just from residents and farms to help business, tax increases for 2021 would be approaching 300 per cent.”

It was also stated the energy industry reaped a considerable reward last year when the provincial government cut their taxes with changes to shallow gas wells.

Reeve Jerry Wittstock stated all four of the assessment options appear to require Kneehill County ratepayers to subsidize oil and gas corporations. 

“It’s not very good news,” said Wittstock. “We can’t let this happen.”

Coun. Faye McGhee stated she heard Premier Jason Kenney answering a reporter’s question by saying the UCP government is seeking input from municipalities and she said she felt the word “seeking” was “very misleading.”

Coun. Ken King stated he was frustrated that the provincial government is listening to corporations, “… but to no one else. The province is in their pocket. I don’t believe the premier is interested in our opinions.”

Councillors accepted the report for information.

 

Stu Salkeld, Local Journalism Initiative reporter

ECA Review

About the author

Stu Salkeld

Stu Salkeld

Stu Salkeld, who has upwards of 28 years of experience in the Alberta community newspaper industry, is now covering councils and other news in the Stettler region and has experience working in the area as well.

He has joined the ECA Review as a Local Journalism Initiative Journalist.

Stu earned his two-year diploma in print journalism from SAIT in Calgary from 1993 to ’95 and was raised in Oyen, Alta., one of the communities within the ECA Review’s coverage area.

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