Alberta rural municipalities say $43M in oil and gas industry taxes went unpaid last year

Click to play video: 'Danielle Smith promises to advocate for rural Alberta at RMA conference, addresses unpaid oil and gas taxes'
Danielle Smith promises to advocate for rural Alberta at RMA conference, addresses unpaid oil and gas taxes
WATCH ABOVE: (From March 22, 2023) In a campaign-style speech at a Rural Municipalities of Alberta conference in Edmonton Wednesday, Premier Danielle Smith addressed concerns of rural communities and families, including schools and education, as well as orphan wells and oil and gas companies who haven't paid their taxes. Saif Kaisar reports – Mar 22, 2023

Some energy companies are still failing to pay millions of dollars in taxes, says a survey released this week by the Rural Municipalities of Alberta.

Oil and gas producers missed $43 million dollars in payments last year, the group says.

“Year after year, the problem drags on due to a lack of industry regulation and accountability,” said president Paul McLauchlin in a release.

The association found oil and gas companies owe the communities in which they operate nearly $252 million in all.

That’s down slightly from last year’s total of $268 million. As well, the pace at which the arrears is growing seems to have slowed.

In the 2023 survey, companies owed about $50 million in “fresh” taxes from the previous year.

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Still, the most recent total is a big jump from the $173 million owed in 2019.

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The fact some companies are still not paying shows the problem isn’t going away, McLauchlin said.

“This issue is not settled. Companies continue to profit from Alberta’s resources while ignoring their community obligations and funnelling profits to executives and shareholders.”

Since last year’s survey, the government made rule changes giving the Alberta Energy Regulator tools to enforce tax payment.

Municipalities are now able to recover unpaid taxes during bankruptcy or insolvency hearings. As well, the regulator can no longer approve licence transfers or new licences for companies with outstanding property tax arrears above $20,000.

McLauchlin said those measures helped, but weren’t enough.

“Neither target the companies at the root of the problem – the ‘zombies’ that continue to operate but have no interest in growing,” he said.

McLauchlin said the regulator has to hold some companies accountable for poor business decisions, high risks and a lack of concern for the public interest.

The regulator said tax enforcement remains the responsibility of municipalities.

“The (regulator) is using information reported by municipalities and collated by Municipal Affairs to identify energy companies that have municipal tax arrears and municipalities remain responsible for the collection and enforcement of their municipal taxes,” said spokesman Renato Gandia in an email.

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“We encourage the Rural Municipalities of Alberta to continue discussions with the government regarding unpaid municipal taxes.”

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