Province moves to enforce unpaid oil and gas taxes for municipalities

Posted on April 13, 2023 by Ryan Dahlman

By Trevor Busch

Commentator/Courier

editor@tabertimes.com

Taking delinquent oil and gas producers to task for mountains of unpaid municipal taxes in the province has long been a goal for those on the losing end of the balance sheet.

Alberta Energy Minister Pete Guthrie issued a ministerial order last month calling on the Alberta Energy Regulator (AER) to require oil and gas companies to pay their taxes to municipalities before they can receive license transfers or new licenses.

The response to the move from affected municipalities in southern Alberta has been nearly unanimous: it’s about time.

“If you want to have any new gas licence, any new well permits, you need to make sure that your taxes and municipalities are paid,” said Taber-Warner MLA Grant Hunter. “And if you don’t, you don’t get it. “If you were idle, not paying your property taxes, there’s consequences to it. We’ve got companies out there that are being bad actors – just to be clear, the vast majority of the companies out there are doing an amazing job, they’re being good stewards and are paying their property taxes. They’re doing a great job. But there are some out there that need to be dealt with.”

A 2022 survey conducted by the provincial government determined oil and gas companies owed more than $220 million in unpaid taxes, mostly to rural municipalities, with another $130 million in tax arrears and $90 million in cancellations.

“It affects people’s budgets, affects their ability to provide safe roads and all the things that you have to provide for services,” continued Hunter. “It’s just not right to have that kind of liability, and that liability with nothing being able to be collected. It’s just an unfair situation. I’ve advocated for this. I think the simplest way is just to be able to say today, are these guys not going to pay their bills? Then they don’t get their extra licence.”

Roughly $76 million in unpaid taxes are currently owed by companies that are still in operation and is considered “partially recoverable”. 

Municipalities have repayment agreements in place that account for about $48 million of that sum.