+ RMA Rural Municipalities
of Alberta

Resolution 2-20F

Blue-Ribbon Panel to Review Unpaid Taxes Owed by Oil and Gas Companies

Date:
November 1, 2020
Expiry Date:
December 1, 2023
Active Status:
Active
Sponsors:
Birch Hills County
District:
4 - Northern
Year:
2020
Convention:
Fall
Category:
Municipal Governance and Finances
Status:
Sent to Government
Vote Results:
Carried
Preamble:

WHEREAS the Government of Alberta oversees the development of the province’s natural resources, grants industry the right to explore for and develop energy and mineral resources, and encourages industry investment that creates jobs and economic prosperity; and

WHEREAS rural municipalities require provincial support in the collection of the unpaid oil and gas property taxes; and

WHEREAS there may exist an inequity in paid taxes between similar properties depending on their location in rural Alberta; and

WHEREAS municipalities require property taxes to provide the infrastructure and services that industry relies on to access natural resources; and

WHEREAS Alberta’s property tax system needs amendment to prevent oil and gas companies from refusing to pay property taxes;

Operative Clause:

THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta urge the Government of Alberta to appoint an independent panel of experts to review unpaid property taxes owed by oil and gas companies and its impact on rural municipalities; and

FURTHER BE IT RESOLVED that the panel provide the Government of Alberta and rural municipalities with implementable recommendations related to the recovery of property taxes owed by oil and gas companies.

Member Background:

Alberta’s rural municipalities face a critical financial situation due to unpaid taxes owed by oil and gas companies. Rural municipalities require provincial support in the collection of the unpaid taxes.

It is time to explore new approaches and alternatives and focus on achieving a sustainable financial situation for rural municipalities. Municipalities require property taxes to provide the infrastructure and services that industry relies on to access natural resources. 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.

RMA Background:

1-19F: Priority of Unpaid Property Taxes on Linear Property

THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta (RMA) advocate for the Government of Alberta to take steps to ensure that municipalities are able to effectively recover all property taxes, including property taxes on linear property;

FURTHER BE IT RESOLVED that RMA advocate for the Government of Alberta to address the growing concern regarding unfunded abandonment and reclamation costs for oil and gas properties and the affect that those costs have on the ability of municipalities to recover unpaid property taxes;

FURTHER BE IT RESOLVED that RMA advocate for the Government of Alberta to make immediate amendments to the Municipal Government Act (MGA) to

  1. Clarify that the reference to “property tax” in section 348 includes all property taxes, including property taxes on linear property;
  2. Clarify the meaning of the phrase “…land and any improvements to the land…” in section 348 to specify that all of the property that is subject to assessment pursuant to Part 9 of the MGA within that municipality is subject to the special lien established in that section;
  3. Provide municipalities with improved enforcement powers, such as the specific power to apply to the courts for the appointment of a receiver to enforce a claim for unpaid linear property taxes against the assets that are subject to a special lien established by section 348;
  4. Apply the above amendments retroactively to ensure that existing linear property tax arrears constitute a secured claim.

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6-19F: Municipal Recourse for Solvent Companies Choosing Not to Pay Taxes

THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta advocate that the Government of Alberta direct the Alberta Energy Regulator to add unpaid municipal taxes to the grounds for which a company may be denied a licence to operate in Alberta.

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6-18F: Securing Municipal Property Taxes in the Event of Bankruptcy or Insolvency

THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta partner with Alberta Urban Municipalities Association to advocate to the Government of Alberta to amend section 348 and other relevant sections of the Municipal Government Act to ensure that municipal property taxes are legally assured a status as a secured claim in the event that the property owner enters bankruptcy or receivership.

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