The County of Stettler wrote off over $85,000 of unpaid property taxes owed by oil and gas companies. The resolution to do so was passed by a 6 to 1 vote at the Dec. 14 regular meeting of council.
Councillors read a report prepared by tax clerk Sharon Larsen describing how the municipality can try to recover some loss to the taxpayer as a result of oil and gas companies not paying their property taxes.
“For oil and gas properties which all avenues of tax collection have been exhausted, a municipality can apply to the province for the provincial education requisition credits and designated industrial requisition credit program for uncollectible property taxes on oil and gas properties,” stated Larsen’s report to council.
Readers should note that the Government of Alberta attaches an education tax to most properties in the province, and it’s typically paid up front by municipalities which then recover it on tax bills mailed out in the spring and early summer. If a property owner doesn’t pay their taxes, including the education requisition, the local taxpayers are left holding the loss.
During her presentation Larsen noted the County of Stettler has exhausted all avenues to recover the unpaid property taxes in question with all of the delinquent property owners in receivership, bankrupt or “disappeared.”
The amount of unpaid property taxes totalled $85,613.64 and included the following companies: Wolf Coulee Resources Inc., Quattro Exploration and Production, Challenger Development Corp., Canadian Oil and Gas International, Rockbridge Energy Alberta and Aeraden Energy Corp.
According to the report the debts owed by these companies, in some cases, dated back to 2018.
Reeve Larry Clarke, looking at the list of companies and the properties connected to them, stated if another company pulls those properties off the orphan well list, especially a new company associated with an old debtor, that concerned him.
“I struggle with that,” said the reeve.
Larsen responded that when properties are newly purchased the County of Stettler can begin applying property taxes, but while they’re on the orphan well list that’s not an option. Larsen added no back taxes are included in the transfer of orphan well list properties and it has been suggested that if back taxes were included it would discourage the sale of wells.
Larsen suggested the County of Stettler bring up the issue of back taxes with the Alberta Energy Regulator (AER).
Coun. Dave Grover asked if it’s possible a well is currently still producing but is on the orphan well list and therefore exempt from property taxes. Grover noted sometimes companies acquiring wells have the same management just under a different name.
County Chief Administrative Officer (CAO) Yvette Cassidy stated the orphan well list is governed by provincial government rules, and the County of Stettler keeps bringing the issue of unpaid property taxes in the oil and gas industry up to the AER which appears to shrug its shoulders at the problem.
Coun. James Nibourg asked if any of the current debtors are still operating, as he didn’t want to see any company in operation get a free pass on their property taxes. Larsen answered all of the companies are defunct.
Coun. Justin Stevens observed that with the provincial government in charge of this issue, there’s not much the County of Stettler can do.
“Unfortunately we have pretty limited powers,” said Stevens.
Coun. Les Stulberg observed that even though many people claim the oil and gas industry has recovered it’s still a fact that rural municipalities continue to write off oil and gas industry unpaid property taxes.
Councillors voted 6 to 1, with Coun. Grover opposed, to writing off oil and gas industry unpaid property taxes totalling $85,613.64 and instructed staff to apply to the appropriate rebate programs.
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