Lacombe County concerned about $1.3M in unpaid oil and gas property taxes

John R. Perry photo

LACOMBE COUNTY – Rural Alberta municipalities face an overall unpaid oil and gas property tax burden of $245.7 million, with still-operating oil and gas companies responsible for 57 per cent of these unpaid taxes. Lacombe County has $1.3 million in outstanding property taxes and this could force a two per cent increase in county property tax rates to recover lost annual oil and gas tax revenues without reducing service levels.

“Lacombe County recognizes the challenges facing the oil and gas industry and has a long history of partnering with companies operating in the area to grow the rural economy,” said Paula Law, Reeve of Lacombe County.

“Many of our ratepayers are experiencing financial difficulties from the economic downturn and effects of the COVID-19 pandemic. We do not support shifting the unpaid oil and gas taxes to Lacombe County property owners because some oil and gas companies are choosing not to fulfill their property tax commitments.”

 Unpaid oil and gas company taxes is a very profound issue for Lacombe County with $1,317,764 of unpaid oil and gas company taxes, including written-off taxes.

This total includes $611,240 unpaid taxes owed by still-operating oil and gas companies and $706,524 unpaid taxes owed by bankrupt/insolvent oil and gas companies.

Though the Rural Municipalities of Alberta (RMA) and its members have continually advocated the Government of Alberta to address the legislative and policy loopholes that allow oil and gas companies to forego paying property taxes, no action has been taken by the province to address this ongoing and growing issue, said Lacombe County.

Lacombe County said it is committed to bringing awareness to this concern and supporting the RMA with its efforts. Unpaid taxes impact ratepayers and municipalities in many ways. Municipalities across the province rely on property taxes to fund the services and infrastructure that the oil and gas industry utilizes daily.

Lacombe County manages 360 kilometres of paved roads, 1,750 kilometres of gravel roads, and 147 bridges.

“Without consistent payment of property taxes, the county may have a tough choice in the future of reducing service levels or increasing taxes,” said Lacombe County.

Municipalities have no choice but to recover every dollar not paid in property taxes by the oil and gas industry from other property taxpayers in the form of increased tax rates or reduced service levels, said Lacombe County.