Right attitudes and local government cooperation

Written by ECA Review

By this afternoon, Tuesday, we’ll all know what financial pain Premier Kenney has designated for us as individuals, companies or communities in order to slash the deficit and restart the ‘good old days’.

More pain has been promised and shouldn’t be unexpected as the economy continues to worsen under Jason Kenney’s leadership and unemployment keeps climbing.

In the Canadian structure of governance, property owners really are the most vulnerable.

The federal government cuts transfers to provinces to balance their budgets.

The provinces then balance their books by cutting municipality budgets leaving municipalities with only two options—cutting essential services or raising property taxes.

It’s not looking particularly good for rural municipalities or property owners.

Premier Kenney recently sided with solvent oil and gas companies who aren’t paying their municipal taxes.

He seemed unemphatic that municipalities were owed $175 million in outstanding property taxes.

Instead, he took to lecturing us about the hard time’s oil and gas companies are facing and how we should all do our part to sustain them.

Municipalities have little taxing power and the little they have must be shared with the provincial education tax which makes up 30 per cent of the total we pay in property taxes.

Kenney has now repealed the Alberta School Foundation Fund which in the past made certain education property taxes were accounted for separately.

All education property taxes now go directly into general revenue—ergo, the education property tax portion is a misleading designation—it is simply another form of provincial taxation which directly competes with municipalities’ only source of revenue—property taxes.

A court decision in 2017, Bank of Nova Scotia, et. al., versus Virginia Hills Oil Corp., et. al., and reconfirmed on appeal last year, established that municipalities were unsecured creditors in bankruptcy cases for unpaid, pre-bankruptcy-filing linear property taxes (pipelines and associated facilities).

Another example where municipalities and property owners are put into a subservient position to those bad actors in the oil and gas sector. The Alberta Court of Appeal Justices noted that it is within the purview of  Legislature to give municipalities priority over secured creditors, but Kenney has consistently shown deference to oil and gas companies over property owners so this won’t happen.

The mystery is why Kenney isn’t consulting municipalities, those with the most intimate knowledge, to come up with sustainable cuts?

In Kenney’s first budget, municipalities took a big hit in their operational budgets and were required to absorb increased policing costs.

Our local governments can ill afford to take another operational budget hit given how shaky their revenue side has become. And it’s not only operational cuts that will harm rural communities – any cuts to community services such as doctors, FCSS, social services, transportation, etc., although not so obvious, will impact a municipality’s financial viability.

Premier Kenney has made it quite clear that he is a top-down manager who takes his advice from outside ‘experts’. Even though rural Alberta is Kenney’s base, he is obsessively focused on oil and gas and deficit elimination.

To survive and thrive during these tough times, it is imperative that municipal leaders become much more intentional in working together in meaningful ways and stop unhealthy competition amongst themselves.

The provincial government is not your friend or ally, but your neighbour can be.

Doug Griffiths, former MLA, in his book, 13 Ways to Kill Your Community” leaves readers inspired with the potential and strategies of keeping communities and regions whole and thriving even through tough times.

The ‘good old days’ will never return, but a ‘brand new day’ is within our grasp with the right attitudes and local governance cooperation.


B. Schimke

ECA Review

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ECA Review

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