The webinar covered a wide range of items, including:
Reasonable care under Bill 12, including weed control and routine maintenance. Licensees must provide reasonable care for their oil and gas well sites:
Orphan Well - if the well has been designated by the Alberta Energy Regulator (AER) as an orphan, theOrphan Well Association (OWA) is responsible for providing reasonable care for the orphan well once they take over management of the well.
Abandoned Well - the licensee or working interest participant is responsible for providing reasonable care.
In the case that the OWA or licensee is not providing reasonable care, the land owner or municipality should contactthe AER, who will be responsible for mandating reasonable care.
Bill 12 and the OFDAF state that the Orphan Fund may be used for reasonable care and measures to prevent impairment or damage, suspension costs, abandonment costs, and remediation costs on smaller and large facilities;
If the OWA takes ownership over a well site that can still produce, from the time the OWA takes ownership they must pay municipal taxes, royalties, and payments to the landowner;
There are some cases where a municipality can negotiate with the AER for existing tax arrears to be paid. To enable this, municipalities would have to make the case that it would be in the public interest for those tax arrears to be paid. Alberta Energy provides some examples of cases where tax arrears may be paid in the webinar.
The recording of the webinar is now availableonline. The password is Qn##fL02.
Alberta Energy is also in the process of developing supplementary resources to further support RMA members, including:
Nisku, AB, August 10, 2020 – The Rural Municipalities of Alberta (RMA) is extremely concerned with the changes to the assessment model for oil and gas properties that are currently being considered by the Government of Alberta. If implemented, the changes would abruptly alter how oil and gas properties are assessed for the purposes of property taxation, with potentially devastating impacts on rural Alberta.
Following a short confidential consultation process with municipal and industry stakeholders, government is currently considering four different scenarios, all of which would drastically reduce the assessed value of oil and gas property. The changes are intended to lower operating costs for companies by reducing the assessment value of wells and pipelines, which form the basis for municipal property taxes. The scenarios are being considered despite opposition from RMA throughout the review process.
“RMA participated in the assessment model review process by explaining the impacts that the changes being proposed by government, and supported by industry, would have on the ability of municipalities to maintain infrastructure, provide services, and in some cases, remain viable. Despite RMA’s input, the changes proposed became steadily more detrimental to municipalities as the process continued.” – Al Kemmere, RMA President.
All scenarios being considered would have major impacts on rural municipalities. Under the scenario favoured by industry stakeholders, an average rural municipality would lose 12.4% of their revenues in the first year of implementation, with 11 RMA members losing over 20%. Collectively, rural municipalities would lose over $290 million in 2021 alone under the industry-supported scenario.
“The proposed changes prioritize reducing industry costs with little focus on municipal impacts,” Kemmere explained. “Some in industry and government view municipal taxes as a barrier to economic development. In reality, municipalities manage the roads and bridges that allow access to resources and provide the services that oil and gas companies and their employees rely on. This review has not considered how municipalities will be impacted by the changes, how they are expected to adapt with the limited revenue tools they have available, or the domino effects the changes will have on entire regions. What the review does show is that the province and industry do not understand the important role municipalities play in Alberta’s economy.”
RMA’s analysis also questions the extent that the changes will enhance the competitiveness of Alberta’s oil and gas industry. Based on confidential company data shared with RMA during the consultation, the proposed changes will disproportionately benefit Alberta’s largest oil and gas companies. Under some scenarios, up to 54% of Alberta’s small oil and gas companies (assessed assets less than $100 million) would actually face an increase in their assessment. In contrast, large international companies would see the greatest cost reductions, with no requirement to reinvest any savings into Alberta.
Kemmere stated, “The province has repeatedly emphasized industry competitiveness as the driver for this review, which is clear when looking at how badly municipalities would be impacted. However, RMA is also concerned that any benefits will go to large companies, while many small companies that would reinvest savings locally would face assessment increases. These changes simply don’t work from a municipal viability or an industry competitiveness perspective.”
RMA is also concerned that the province has not considered the impacts that the changes will have on Alberta’s villages, towns, and cities. Firstly, Alberta municipalities are requisitioned or invoiced from the Government of Alberta for costs related to education, seniors housing, and policing. The amount each municipality pays is determined in part by the assessed value of the properties within their boundaries. If rural assessment values drop significantly, urban municipalities will see their contribution costs to provincial services increase. Secondly, municipalities across Alberta have worked for several years on developing intermunicipal collaboration frameworks (ICFs) with their municipal neighbours. ICFs support neighbouring municipalities in developing approaches to the shared delivery of services that can be more efficiently delivered on a regional basis. Many ICFs are in the final stages of development or have been completed within the last year, but many will be impacted by reductions in rural assessment, as many rural municipalities will simply lose the financial capacity to contribute to regional service delivery at a level agreed upon in ICFs.
“Although rural municipalities will be more directly impacted by the proposed assessment model changes than their urban neighbours, the impacts of abrupt reductions in assessment spill across municipal borders and will have implications for entire regions,” said Kemmere. “The province has emphasized the importance of regional collaboration in recent years, yet these changes will undermine the hard work that municipalities have undertaken to build relationships with one another and determine how to serve their residents effectively. It is yet another example of a lack of consideration of the secondary impacts of manipulating the assessment model on the part of the province.”
Since the review concluded and confidentiality requirements were lifted, many RMA members have informed their local MLAs and ratepayers of how concerning the proposed changes are for rural Alberta. RMA appreciate the efforts of our members and hopes to build on this local advocacy success by meeting with the Premier and other government decision-makers to inform them of the province-wide rural impacts and to dispel the assumption that the changes will have industry-wide benefits. This is especially important given indications that industry stakeholders have received attention from government on this issue despite representing only a small portion of the companies impacted by the changes.
Rural Alberta recognizes the importance of the oil and gas industry in contributing to Alberta’s economy, and strives to work collaboratively to support industry activities. The assessment system in Alberta is not perfect, and likely does need to be reviewed, but this should be done through an open, collaborative, and transparent process involving direct engagement with municipalities; the level of government that will be most impacted. The changes being proposed will devastate municipalities, as well as rural residents and businesses that will face reduced services or increased taxes to off-set the tax break being provided to the oil and gas industry.
“RMA needs to meet with government on this issue not only to advocate for their member municipalities, but to advocate for rural businesses and residents, all of whom will see negative impacts from these proposed changes, which are laser-focused on cutting costs for one industry. This government has called for Alberta to receive a fair deal from Ottawa. However, going through with these changes to the assessment model will result in rural Albertans wondering if they will receive a fair deal from the provincial government,” Kemmere said.
The Rural Municipalities of Alberta (RMA) is an independent association comprising Alberta’s 69 counties and municipal districts. Since 1909, the RMA has helped rural municipalities achieve strong, effective local government. The RMA provides Advocacy and Business Services (including RMA Trade, RMA Fuel and RMA Insurance).
EOEP is offering this previously sold out interactive course a second time!
The Elected Officials Education Program (EOEP) has been working hard to find ways to provide access to programs during the COVID-19 pandemic and has developed an exciting opportunity for RMA and AUMA members to participate in a virtual offering of the Municipal Corporate Planning and Finance course. This course – previously offered in July and August and sold out – has been adapted to include information for elected officials regarding COVID-19 impacts on municipal finances. It will be facilitated by Rodney Boyko, an experienced EOEP facilitator who has previously been involved with revising the content of the finance course.
The course will be offered using a hybrid delivery, some homework reading required by participants, as well as four video chat sessions. This will allow participants to review material on their own as well as participate in group discussions and ask questions during the video chat sessions. The interactive course will be offered with the following schedule utilizing the Zoom platform:
Session #1: Thursday, September 10, 2:30 – 4:30 pm (this session is an extra 30 minutes to allow for an introduction to the technology used)
Session #2: Thursday, September 17, 2:30 – 4:00 pm
Session #3: Thursday, October 1, 2:30 – 4:00 pm (please note that the schedule skips the previous week)
Session #4: Thursday, October 8, 2:30 – 4:00 pm
The course will be offered at a reduced rate of $200. Please note that although EOEP encourages as many members of your council to participate as are interested, each participant must have their own device and individual registration to access course materials and video chats.
This course offering comes on the heels of three previous online EOEP courses, all of which sold out in just a few days, so be sure to register early.
Transport Canada is launching the second phase of consultation on the Minor Works Order of the Canadian Navigable Waters Act (CNWA). The CNWA regulates the construction, placement, alteration, rebuilding, removal, or decommissioning of works that are in, on, over, under, through, or across any navigable water in Canada. As part of the act, the Minister of Transport can designate a work that is likely to slightly interfere with navigation as a “minor work”. The Minor Works Order is used to identify such works.
For example, works that only slightly interfere with navigation do not:
cause navigators to unreasonably alter their habits related to navigation in the area, such as speed and course
reduce the safety of navigation or ability to enjoy the use of the body of water for navigation
An owner of a minor work may construct, place, alter, rebuild, remove, or decommission the minor work in, on, over, under, through, or across any navigable water in accordance with the requirements found in the Minor Works Order. The order protects navigation by requiring minor works to meet certain criteria and requirements.
Owners of works that comply with the requirements of the Minor Works Order do not need to seek an approval from Transport Canada or follow the process for works on waterways not listed on the schedule.
Changes will shift the requirement for certain vehicle configurations from a provincial permit to regulatory requirement
Alberta Transportation has announced changes to several commercial carrier permits that will shift the regulation of certain vehicle configurations to regulatory requirements. This move is being made as a red tape reduction initiative, as these permits will no longer be applied for by commercial carriers, rather the requirements regarding these vehicles will be addressed in regulations of theTraffic Safety Act. These changes will come into effect January 1, 2021.
The announced changes will not affect a municipality’s ability to restrict weights allowed on municipal roads to less than the regulatory amounts. However, these changes may require municipalities to amend or create new bylaws in order to manage weights on municipal roads. Please review thesummary document to see if bylaw changes are required in your municipality.
Of particular importance for municipalities is a change that will allow tridem axles the same weight on municipal roads as provincial roads. These vehicles will continue to be required to comply with posted bridge capacities and municipal bylaws restricting weight.
This information has also been sent directly from Alberta Transportation to municipalities.
The program will distribute $500 million to Alberta municipalities for capital projects to help stimulate the local economy
On July 30, 2020, the Government of Alberta announced theMunicipal Stimulus Program (MSP), which is intended to support municipal capital infrastructure projects as a means to contributing to local job creation and economic recovery.
The MSP includes $500 million in funding to bedistributed to all municipalities in Alberta based on the existing Gas Tax Fund allocation formula (a per capita distribution process with $50,000 minimum funding for municipalities with smaller populations, and $5,000 minimum funding for summer villages).
Municipalities may use the funding for projects that adhere to the eligible project categories for the Municipal Sustainability Initiative, with some exceptions (see theMSP Program Guidelinesfor a full list of eligible and ineligible projects).
Municipalities must apply for their MSP funding, with specific projects, by October 1, 2020. Project funding must be spent on accepted projects prior to December 31, 2021. Municipalities will lose access to any portion of their allocation that is not committed to an accepted project submitted as of October 1, 2020. Municipalities may apply for funding for up to five projects, although the Government of Alberta recommends an application with two or fewer projects to minimize administrative and reporting requirements.
As a condition of receiving MSP funding, municipalities are required to complete two annual “Red Tape Reduction” reports. The reports will address the following questions for the municipality:
What steps have been taken to make it easier to start up a new business in the municipality?
What steps have been taken to streamline processes and shorten timelines for development and permit approvals?
What steps have been taken to make the municipality a more attractive destination for new investment and/or tourism?
The first Red Tape Reduction report is due February 1, 2021, and the second is due February 1, 2022. The Government of Alberta will provide municipalities with a report template at a later date.
Municipalities are encouraged to review, complete and submit the MSP application form as soon as possible. Although the submission deadline is October 1, 2020, funding disbursement may begin in September.