By Justin Seward
Rural municipalities may have gotten the news they wanted to hear on Oct. 19.
Municipal Affairs Tracy Allard announced the provincial government would lower assessments for less productive oil and gas wells and still continue the recently introduced 35 per cent assessment reduction on shallow gas wells for three years.
The measures are in place to ensure much-needed certainty to industry, investors, municipalities and other taxpayers now and into the future.
“We are acting now to encourage new oil and gas development that will create jobs and boost Alberta’s recovery,” said Allard.
“Alberta needs to be as competitive as possible to attract investment into our communities. We know our municipal partners are committed to do their part to create jobs and support Albertans through this challenging economic time. We are working to secure a brighter future for our province by supporting both industry and communities.”
Cypress County Reeve Dan Hamilton said, “The County is happy they held back on that.”
“My understanding is they’re in talks with our assessors and our staff and they’re trying to get to the bottom of everything. Hopefully they maintain the talks and openness and come up with something that works for everybody.”
Hamilton says the county does not have a clear idea of where the government is going to go with it.
“We’re going to keep running as we are and as lean as we are, and we’ll look for any savings or cuts that we can do and still maintain the service we’re carrying out right now,” said Hamilton.
Cypress County could have lost 20 per cent ($7.8 million) in gas and oil revenue in the first year alone in the worst-case scenario if the prooposed assesment change went through.
There will be additional support to energy companies that includes an exemption from property taxes for three years when drilling new wells and building new pipelines. The government will eliminate the Well Drilling Equipment Tax province wide for new drilling.
The decision was made possible because of the commitment of consulting with partners in both sectors.
“In the coming months, government will be developing a plan for longer-term reviews of the regulated assessment system and remains committed to continued consultations and open dialogue,” reads the release.
Rural Municipalities of Alberta president Al Kemmere views the announcement as another step towards municipal viability.
“This announcement reflects an effort to achieve a fair balance between enhancing oil and gas industry competitiveness and supporting municipal viability,” said Kemmere
“RMA appreciates the efforts of Minister Allard to reach out to municipalities to better understand how important the current assessment model is to supporting municipal infrastructure and operations, and the efforts of the entire Government of Alberta caucus in supporting these short-term initiatives. RMA looks forward to working with the Government of Alberta and industry in the coming years to ensure that rural municipalities can address their viability and continue to do their part to support industry competitiveness in a way that reflects a strong partnership.”
The provincial government and municipalities will continue to work with the industry how to best update the assessment model for the longer term when the three –year measures conclude.