The reeve of the County of Stettler says the provincial government’s Oct. 19 decision on the oil and gas assessment review shows Edmonton listened to rural municipalities.
Reeve Larry Clarke stated by phone Oct. 20 the announcement of a three-year program for new oil and gas developments appeared to address concerns from everyone involved, both municipalities and the energy industry.
“I think that’s what they were trying to do,” said Clarke, a farmer who has also worked in the oil patch.
Clarke stated when the review first came to light under former Municipal Affairs Minister Kaycee Madu, four scenarios had been proposed, with scenario #4 the preferred one, which benefitted the energy industry the most, apparently at the expense of rural municipalities.
However, Clarke stated that once incoming Minister Tracy Allard took over, the tone changed and it appeared Allard listened to concerns voiced by rural municipalities about the effects of reduced tax revenues.
Changes amount to a three-year program that allows new wells, pipelines and other new equipment to enjoy zero property taxes, along with the provincial government dropping assessment for wells that don’t produce highly.
These announcements are on top of those tax cuts made last year by the provincial government for shallow gas wells.
Clarke stated the three-year program shouldn’t have huge effects here.
“I don’t really seeing it affecting our taxpayers,” said Clarke, who noted he doesn’t predict a lot of new drilling in the County of Stettler while the oil and gas industry copes with a downturn.
Clarke stated if there’s any new construction, it will probably be in northern Alberta.
The announcement Oct. 19 by Minister of Municipal Affairs Allard was the result of a tense summer that even saw rural councillors protesting proposed assessment changes at the Alberta Legislature.
Certain energy industry members have claimed that rural municipalities are taxing industry so highly it’s threatening to put some oil and gas companies out of business.
Another major issue that’s been facing rural municipalities in the oil and gas downturn is unpaid taxes.
Some members of the energy industry have declined to pay their property tax bills, and municipalities have no recourse to recover the lost revenue; no changes to this system were made by Allard in her announcement.
Over the last five years the County of Stettler has lost $7.6 million in revenue due to unpaid property taxes, almost an entire annual budget for the municipality.
Clarke stated most of this is owed from oil and gas companies.
Clarke stated even though Allard didn’t make any changes to unpaid property taxes, he felt optimistic that Allard heard that rural municipalities are very concerned about this problem.
“I think they do realize that,” said the reeve.
Several meetings were held in Stettler over the past summer to discuss the assessment review that included rural municipalities and provincial ministers and MLAs.
It was stated at one of these meetings that most if not all rural multiplicities felt left out of the oil and gas assessment review process, which appeared to include only provincial government ministries and the energy industry.
Later, after four proposals were made to lower energy industry property taxes, rural municipalities were invited to participate, according to speakers at one of the Stettler meetings.
Some urban municipalities even voiced concern because assessment changes could affect any urban-rural agreements based on assessment, or urban municipalities which had certain oil and gas developments within their boundaries.
Clarke stated he was very impressed by Drumheller-Stettler MLA Nate Horner’s help through this process.
“He lives in a rural constituency that’s very much affected by oil and gas,” said Clarke, noting Horner went to bat for the rural municipalities in his constituency.
Stu Salkeld, Local Journalism Initiative reporter