- The Energy Mix - https://theenergymix.com -

Ex-Alberta Liberal Leader Declares Tax Revolt Over Deadbeat Fossils’ $173M Debt to Rural Municipalities

The Interior/Wikimedia Commons

A former opposition politician in Alberta is calling for a tax revolt after Premier Jason Kenney sided with deadbeat fossils against the rural municipalities they’re depriving of C$173 million in local tax revenue.

Ex-provincial Liberal leader David Swann declared Wednesday that he won’t pay his own property taxes until the provinces forces fossils pay their share, CBC reports [1]. “Swann’s call for action follows reports from the Rural Municipalities of Alberta (RMA) that its members are out $173 million from unpaid property taxes from oil and gas companies—$100 million of which they say is owed from companies that are still operating.”

Like this story? Subscribe to The Energy Mix and never miss an edition of our free e-digest.

“I’m outraged [about] a lack of accountability of successive provincial governments in not holding oil and gas companies, many foreign owned, accountable to Alberta citizens,” Swann said. “I’m outraged by a government that takes no action against operating companies that, despite continuing to pay generous salaries to executives and shareholders, decide not to pay taxes to hard-strapped municipalities.”

“Who knew that paying taxes in Alberta was an option? Swann added. “Some oil and gas companies are treating taxes, whether urban or rural, as optional, with the government subsidizing them and then calling on municipalities to lower their taxes.” So “I’m announcing that as of today, I will not be paying my property taxes…until this government finds its backbone.”

The RMA’s report, issued Monday, showed fossils’ unpaid taxes more than doubling from last March, when they stood at $81 million [3], the Edmonton Journal reported [4]. Late last year, the communities learned [5] they would also be expected to shell out C$20 million per year in lost revenue from 2020 on, under a tax rebate for shallow gas well developers introduced by the provincial government.

“Many oil and gas companies are unable or unwilling to pay municipal property taxes due to the ongoing downturn in the price of oil and Alberta’s challenges in market access and receiving a fair price for its resources,” the association said in a release. “Rural municipalities also have little recourse to recover unpaid taxes from companies that have declared bankruptcy, as municipalities rank below the Alberta Energy Regulator in priority for seizing the assets of a bankrupt company.”

RMA president Al Kemmere expressed concern about the way the province collects taxes, as well as the recent concessions to gas companies. “If Alberta’s property tax system is not amended to prevent oil and gas companies from refusing to pay property taxes, many rural municipalities will struggle to remain viable,” he said in the release. “Rural municipalities are proud of their role as partners and supporters of Alberta’s oil and gas industry,” he added. But “municipalities require property taxes to provide the infrastructure and services that industry relies on to access natural resources.”

Kenney responded a day later, urging the communities “to work with the province to help struggling oil and gas companies,” CBC wrote [6], adding that “you can’t wring money from a stone.” Kemmere replied in turn that the RMA is open to discussion, but warned the province’s Municipal Government Act limits their flexibility.

“We are also in a very limited scope of what we can do, too, because [while] other levels of government can…build a deficit into their budget, we cannot,” he explained. “That limits us again on what we can do and how we can find solutions. We either balance a budget every year or we are in contempt of our own act.”

Last week, the Kenney government came under fire for the multi-billion-dollar liability it is accumulating with orphaned and abandoned oil and gas wells. Recent assessments have suggested that cleaning up the abandoned sites could cost [7] as much $70 billion and take 2,800 years [8] to complete.

After the province’s Orphan Well Association declared [9] the process for assessing and transferring abandoned wells inadequate, the province vowed to do better. “These policies will ensure the cleanup of inactive wells is addressed by producers—not on the backs of taxpayers—while still ensuring an environment for industry to be successful,” Alberta Energy spokesperson Kavi Bal wrote [10] in an email.

Yesterday, Alberta’s auditor general’s office announced [11] it would look into the 3,406 orphaned wells and 94,000 additional abandoned sites across the province. “We will be focusing on both whether the government—and specifically the Alberta Energy Regulator—has the systems and processes to assess whether orphan oil and gas sites are being managed and reclaimed efficiently and economically in the best interests of Albertans,” said spokesperson Val Mellesmoen.