The UCP is issuing a new directive to the Alberta Energy Regulator (AER) to require oil and gas companies to pay taxes owed to municipalities.. Oil pumpjacksCanada’s largest oil industry group says the world needs more Canadian energy, not less. .On Monday, Alberta Minister of Energy Pete Guthrie said he's issuing a ministerial order under the Responsible Energy Development Act requiring the AER to receive evidence municipal taxes have been paid when approving licence transfers or new licenses..“While most companies pay their taxes regularly and on time, there are a few delinquent companies that owe overdue property taxes,” Guthrie said..“That's why we’re putting in place this ministerial order — to continue building on our recent work. Our goal is to reduce unpaid taxes throughout the province.”.The departments of Energy and Municipal Affairs worked together on the directive. Companies will now have to confirm their unpaid municipal taxes across the province do not exceed the maximum threshold allowed, or they have a repayment agreement in place whenever they apply for new licenses or for licence transfers because they’re seeking to sell their assets..“Our government is serious about addressing the ongoing problem of unpaid municipal taxes. This problem lingered for far too long, and while some viable companies started to pay their back taxes, others are still not getting the message,” said Municipal Affairs Minister Rebecca Schulz..“This direction to the Alberta Energy Regulator will have real consequences for those delinquent companies. In Alberta, we pay what we owe, and it’s time to pay up.”.The UCP said the measure will help reduce unpaid taxes and reassure municipalities and Albertans companies are financially healthy and able to meet their tax obligations..“The RMA is pleased to see the province taking action to hold oil and gas companies accountable for paying property taxes,” said Paul McLauchlin, president of Rural Municipalities of Alberta..“Although only a small number of companies avoid their property tax payment obligations, this issue has had major fiscal impacts on rural municipalities across Alberta.”.McLauchlin said 41% of unpaid taxes are owed by companies currently operating in Alberta..“We're optimistic this change will have an immediate positive impact in rural Alberta,” McLauchlin said..“We look forward to working with the AER and relevant ministries to determine how our members can support the AER in enforcing this new requirement.”.Under Alberta’s liability management framework which launched in 2020, the AER revised their licence eligibility requirements to include a more holistic assessment of a company’s financial health that is applied through the life cycle of an asset..The new directive strengthens the AER’s approach by making payment of municipal taxes a necessary and mandatory condition for approval, based on available data..The maximum threshold will be determined after reviewing the AER’s analysis of current licensee information related to unpaid municipal taxes, and in consultation with Municipal Affairs and Energy..The UCP said Municipal Affairs and the AER will work together to create an annual list of companies whose unpaid municipal taxes exceed the threshold amount..Companies on the list will be targeted by the AER to provide proof of tax payment..The UCP said the approach provides the most effective opportunity to collect taxes owed without increasing unnecessary red tape for the many companies already paying their taxes as required..Along with the liability management framework, other actions the UCP has taken to address the issue of unpaid taxes by oil and gas companies include:.Municipal Affairs has restored a special lien in legislation to give municipalities priority over other creditors and has provided the Rural Municipalities of Alberta with a $300,000 grant for resources and training related to the special lien.Municipal Affairs continues to deliver the Provincial Education Requisition Credit (PERC) program, which gives municipalities a break on their education property taxes by giving them credit for noncollectable taxes on oil and gas properties..The UCP said it conducted the Unpaid Oil and Gas Property Taxes survey in 2022 and found these key findings:.A cumulative $220 million in unpaid taxes was reported by municipalities, with $130 million in tax arrears (including penalties and interest) and the remaining $90 million in cancellations.Many of these taxes will not be recoverable outside insolvency proceedings because they are owed by companies no longer operating or because the taxes have already been written off by municipalities, or both.A smaller but significant portion of unpaid taxes, approximately $76 million, is owed by companies that are still operating and is potentially recoverable, including through repayment agreements..Municipalities said they reported they already have repayment agreements in place to help collect $48 million in unpaid taxes..The UCP said there's further potential for municipalities to recoup another $28 million from companies that are still operating.
The UCP is issuing a new directive to the Alberta Energy Regulator (AER) to require oil and gas companies to pay taxes owed to municipalities.. Oil pumpjacksCanada’s largest oil industry group says the world needs more Canadian energy, not less. .On Monday, Alberta Minister of Energy Pete Guthrie said he's issuing a ministerial order under the Responsible Energy Development Act requiring the AER to receive evidence municipal taxes have been paid when approving licence transfers or new licenses..“While most companies pay their taxes regularly and on time, there are a few delinquent companies that owe overdue property taxes,” Guthrie said..“That's why we’re putting in place this ministerial order — to continue building on our recent work. Our goal is to reduce unpaid taxes throughout the province.”.The departments of Energy and Municipal Affairs worked together on the directive. Companies will now have to confirm their unpaid municipal taxes across the province do not exceed the maximum threshold allowed, or they have a repayment agreement in place whenever they apply for new licenses or for licence transfers because they’re seeking to sell their assets..“Our government is serious about addressing the ongoing problem of unpaid municipal taxes. This problem lingered for far too long, and while some viable companies started to pay their back taxes, others are still not getting the message,” said Municipal Affairs Minister Rebecca Schulz..“This direction to the Alberta Energy Regulator will have real consequences for those delinquent companies. In Alberta, we pay what we owe, and it’s time to pay up.”.The UCP said the measure will help reduce unpaid taxes and reassure municipalities and Albertans companies are financially healthy and able to meet their tax obligations..“The RMA is pleased to see the province taking action to hold oil and gas companies accountable for paying property taxes,” said Paul McLauchlin, president of Rural Municipalities of Alberta..“Although only a small number of companies avoid their property tax payment obligations, this issue has had major fiscal impacts on rural municipalities across Alberta.”.McLauchlin said 41% of unpaid taxes are owed by companies currently operating in Alberta..“We're optimistic this change will have an immediate positive impact in rural Alberta,” McLauchlin said..“We look forward to working with the AER and relevant ministries to determine how our members can support the AER in enforcing this new requirement.”.Under Alberta’s liability management framework which launched in 2020, the AER revised their licence eligibility requirements to include a more holistic assessment of a company’s financial health that is applied through the life cycle of an asset..The new directive strengthens the AER’s approach by making payment of municipal taxes a necessary and mandatory condition for approval, based on available data..The maximum threshold will be determined after reviewing the AER’s analysis of current licensee information related to unpaid municipal taxes, and in consultation with Municipal Affairs and Energy..The UCP said Municipal Affairs and the AER will work together to create an annual list of companies whose unpaid municipal taxes exceed the threshold amount..Companies on the list will be targeted by the AER to provide proof of tax payment..The UCP said the approach provides the most effective opportunity to collect taxes owed without increasing unnecessary red tape for the many companies already paying their taxes as required..Along with the liability management framework, other actions the UCP has taken to address the issue of unpaid taxes by oil and gas companies include:.Municipal Affairs has restored a special lien in legislation to give municipalities priority over other creditors and has provided the Rural Municipalities of Alberta with a $300,000 grant for resources and training related to the special lien.Municipal Affairs continues to deliver the Provincial Education Requisition Credit (PERC) program, which gives municipalities a break on their education property taxes by giving them credit for noncollectable taxes on oil and gas properties..The UCP said it conducted the Unpaid Oil and Gas Property Taxes survey in 2022 and found these key findings:.A cumulative $220 million in unpaid taxes was reported by municipalities, with $130 million in tax arrears (including penalties and interest) and the remaining $90 million in cancellations.Many of these taxes will not be recoverable outside insolvency proceedings because they are owed by companies no longer operating or because the taxes have already been written off by municipalities, or both.A smaller but significant portion of unpaid taxes, approximately $76 million, is owed by companies that are still operating and is potentially recoverable, including through repayment agreements..Municipalities said they reported they already have repayment agreements in place to help collect $48 million in unpaid taxes..The UCP said there's further potential for municipalities to recoup another $28 million from companies that are still operating.
