Government renews tax credit programs to offset uncollectable education and industrial taxes
The Government of Alberta has announced a three-year extension of the Provincial Education Requisition Credit (PERC) and Designated Industrial Requisition Credit (DIRC) programs, expanding eligibility through the 2028 tax year and increasing the annual PERC program cap to $7 million. This extension is connected to Recommendation 12 of the Property Tax Accountability Strategy (PTAS) Final Report and will provide credits to municipalities for the education and designated industrial requisition amounts tied to uncollectable oil and gas taxes.
In a recent letter to municipalities, the Minister of Municipal Affairs confirmed the following updates:
- PERC and DIRC eligibility is extended through the 2028 tax year, retroactive to 2015
- The annual PERC program cap increases from $3 million to $7 million, reflective of increased program demand
- Municipalities may continue to apply for PERC and DIRC through a single application process
- Government intends to explore opportunities to streamline program delivery as part of its broader response to the PTAS
Members can access guidance materials, applications forms, and contact information on the Government of Alberta’s PERC/DIRC webpage.
RMA Analysis
The extension aligns with Recommendation 12 of the PTAS Final Report, which calls for renewing and adequately funding the PERC program until unpaid oil and gas taxes no longer present a material impact on rural municipalities. The Report notes that a three-year commitment represents the minimum threshold for long-term funding, with the expectation that PERC remain in place for as long as municipalities continue to experience significant financial impacts. The Report also emphasizes that while the program may reduce municipal fiscal impacts in the short-term, it provides only partial relief by offsetting education requisition costs which cover only a portion of outstanding taxes and ultimately represents a public payment in place of industry meeting its obligations.
Earlier this month, RMA provided government with Property Tax Accountability Strategy: RMA’s Priorities and Expectations for Government Action, which outlines clear expectations for how the province should advance implementation of the PTAS Final Report and address the broader issues contributing to unpaid municipal taxes by the oil and gas sector.
While the extension of PERC and DIRC represents a positive step in responding to PTAS recommendations, these programs address only one aspect of a much broader issue. It mitigates a portion of municipal losses but does not improve industry compliance, strengthen enforcement tools, or resolve the growing burden of unpaid municipal taxes.
Next Steps
RMA has been in active communication with the Government of Alberta following the submission of RMA’s Property Tax Accountability Strategy: RMA’s Priorities and Expectations for Government Action document. Government representatives have indicated that they are currently working through the internal processes required to develop a formal response to the PTAS Final Report, including seeking Cabinet direction on next steps. RMA expects an update from the province in the coming weeks on where the PTAS response stands within that process.
RMA remains committed to advancing the PTAS recommendations and will keep members updated as government provides further information on its progress and anticipated timelines.
For more information, contact RMA’s Policy and Advocacy Team at advocacy@rmalberta.com or 825.319.2383.