The Alberta Urban Municipalities Association is calling on the province to change legislation to allow local governments to collect property taxes from oil and gas properties when they fail.
The association also wants the Alberta Energy Regulator to consider unpaid property taxes as grounds to deny an energy company an operating licence.
“Since municipalities currently have no legislative tool to collect these owed taxes, we urge the provincial government to update the Municipal Government Act so that municipal property taxes can be collected from oil and gas properties in the event of bankruptcy or receivership,” AUMA President Barry Morishita said Friday in a release.
“Having municipalities shouldering these economic burdens from oil and gas companies impairs our economy.”
The association says it represents cities, towns, villages, summer villages, and specialized municipalities where more than 85 per cent of Albertans live.
Morishita noted the association is in solidarity with the Rural Municipalities of Alberta, which earlier this week said the amount of unpaid property taxes that oil and gas companies owe its member communities has more than doubled over the last year.
The RMA says its member municipalities are owed a total of $173 million.
Association president Al Kemmere has said 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.
Municipal Affairs Minister Kaycee Madu said the Kenney government recognizes the effect the unpaid taxes is having on communities.
“We are working to identify potential tools that may help balance the interests of municipalities with the economic realities facing many employers since the 2014-15 downturn,” Madu said in a release.
“This issue is complex, particularly given some of the companies involved have long since gone out of business. Although we have taken immediate steps to provide industry and municipalities with short-term support in these difficult economic times, we know we cannot kick the can down the road.”
The Alberta Court of Appeal ruled last year that municipalities are unsecured creditors, which puts them at the back of the line for tax debt collection after a bankruptcy.
READ MORE: Alberta landowners urge farmers to cut power to wells with unpaid debts
Watch below: (From Jan. 21, 2020) Struggling oil and gas companies in Alberta now owe nearly $200 million in back property taxes. Rural municipalities say this has taken a giant toll on their bottom line. Tom Vernon reports on their demands of the UCP government.