The Alberta government announced a tax credit Wednesday for rural municipalities dealing with uncollectable education property taxes on oil and gas properties.
Oil and gas facilities are taxed until they are listed by the Alberta Energy Regulator as abandoned.
But that process can take years and until that happens, municipalities still have to remit the education portion even though there’s no money to collect.
“I heard loud and clear during my visits to rural communities this summer that they are facing tax recovery challenges. So we made this a priority and worked with the Alberta Association of Municipal Districts and Counties (AAMDC) to come up with this solution,” Municipal Affairs Minister Shaye Anderson said.
The Provincial Education Requisition Credit, or PERC, will be retroactive to 2015 when oil prices began to fall. It will operate for five years, until 2019.
Municipalities that have written off the municipal property tax for oil and gas facilities will be eligible to apply for the credit on the education portion of their property tax.
“Having to pay education tax to the government that couldn’t be collected has created significant financial challenges for our members,” AAMDC president Al Kemmere said.
“Municipalities can now focus on other matters, as we look forward to the long-term solution to this issue.”
The first deadline for applications is January 2018.
A cost estimate of the program will be determined once the first applications have been received, but program spending is capped at $10 million per year.
PERC does not apply to other types of uncollectable municipal property tax, or to seniors’ housing requisitions.