By Justin Seward
After Cypress County found out recently that if the assessment review results in a change, that the municipality would see a revenue loss of $7.8 million in the first year.
The province is working on a review that would change how linear assessments are done.
Things like electric power systems, street lighting, telecommunication, railway property and pipelines and wells are included in the linear assessments under the Municipal Government Act.
Oil and gas companies are the focus of the linear assessment change.
The proposed scenarios could see the county lose between 16 and 22 per cent. The average according to the RMA report is between six per cent in the first scenario to 20 per cent in the worst-case scenario.
Each of the four models looks at base cost, depreciation, land, assessment, statutory levels and other adjustments.
The change would see an increase in residential tax to between 132 and 181 per cent , a non-residential increase of 40 to 64 per cent and a farmland tax increase of 1,550 per cent.
The county has been in contact with local MLAs Drew Barnes and Michaela Glasgo and their hope is to see a change in the assessment review.
“The policy has not been decided and I’ll clearly say the go ahead with this policy is wrong,” said Barnes.
“The long and the short of it,this is not the way to help oil and gas producers. There is better ways to do it by looking at things like the LMR (liability management rating) ratio and the Redwater court decision that didn’t allow municipalities and banks to have first security against the wells. Those are things we should look at changing instead.”
Barnes said “For a county like Cypress County that looks after 6,300 kilometres of roads, and runs a pretty good ship now, and to lose 25 per cent of their revenue in one year is going to create such a hardship.”
Barnes gave the example of that municipalities should have three years to organize their tax options and get their spending in line, and make sure the tax burden is not reflecting back on the families and businesses.
“There has not been a review for 15 years,” said Barnes.
“I think that it is fair that we look at an assessment model that is based on the value of the wells and (its) commodities as the value of oil and gas fluctuates . I think it’s fair the assessment fluctuates as well, just the same way as income property.”
Glasgo says both the County of Newell and Cypress County have benefited from shallow gas revenue for a decade.
“We know we have to be partners with our oil and gas industry,” she said.
“Cypress and Newell both have some of the lowest taxes in the entire province to start off with. They have been productive partners. They have worked effectively with oil and gas companies for decades to ensure they’re meeting their needs and providing the best service for rate payers through taxation.”
With the review, Glasgo believes the right balance has to be struck between the viability of an oil and gas company and the well being of rural Alberta.
“As the MLA for Brooks-Medicine Hat, I am very keenly aware of what that means to our local municipalities,” said Glasgo.
“In fact, I met with him (Minister Madu) yesterday (Aug.5) and the day before. We’ve been in constant communication on this and I have assured them I will be their voice at the table, making sure that they know that I have their back on this.”