But municipalities still get hurt
Changes to how energy companies are assessed for property taxes won’t be as harsh on municipalities as initially feared. That’s the good news that came out last week via new Minister of Municipal Affairs Tracy Allard.
Readers will recall that the estimate for the M.D. of Lesser Slave River was that property taxes (for everyone besides the oil companies in question) would have to double, to maintain services at current levels. That number came from the Rural Municipalities Association, which was lobbying furiously against the government proposals on behalf of its members. Apparently it worked – or worked up to a point.
“Minister Allard admitted the first proposals were not fair,” says M.D. of Lesser Slave River Reeve Murray Kerik. “They are going to spend the next three years reviewing the assessment system.”
Kerik got that from Allard’s announcement on Oct. 19. He also heard that, “Basically they are giving the oil and gas operators three years tax free (on our backs) for new wells and pipelines. We will still have to maintain the roads and bridges they use, at our expense.”
Further, says the reeve, “any fields with low production numbers will have their assessments reduced. Once again, the residents still have to pay to maintain infrastructure!”
In other words, not a good deal for municipal taxpayers. What the actual hit to the M.D. budget will be remains to be figured out.
The total cost in lost revenue across all municipalities the government estimates will be $80 million. That’s as opposed to the estimated $270 million in the initial proposal.
A separate but related issue is all the unpaid tax from the oil industry, which “still has to be rectified,” Kerik says.