Alberta’s opposition is calling on the province to stop proposed assessment changes that would reduce municipal taxes for oil and gas companies and significantly reduce the revenue rural municipalities have at their disposal.
The changes could mean some major budget cuts for rural communities in southern Alberta and around the province.
In a press conference on Tuesday, Notley and MLA Joe Ceci sounded the alarm on the proposed changes to the Linear Property Assessment model, which would alter the way that oil wells and underground pipelines are assessed for taxation purposes.
“Frankly, we know that pretty much every rural municipality — and by that I mean I.D., M.D., and county — will be negatively implicated by this,” Notley said.
M.D. of Taber Reeve Merril Harris says his municipality could lose about 25 per cent of its budget if the proposed changes are passed.
“Under the worst case scenario, that reduces the assessment base of the municipality by about $400 million, which translates into about $4 million in lost revenue for the municipality,” Harris told Global News.
“When the municipality that runs on about a $15 million budget has $4 million taken out of it, that’s a severe cut.”
Harris confirmed that the M.D. could lose $4.1 million in revenue, a number reported by the NDP in a release on Tuesday.
That release continued with the party saying the changes “could cost the average family over $9,000 a year more in property taxes for some rural communities,” but Harris says the M.D. of Taber is determined to leave taxes unchanged, instead making service cuts to bridge the gap.
Harris says he and other members of the Rural Municipalities Association (RMA) met with Municipal Affairs Minister Tracy Allard recently to lobby against the changes. He says they also pleaded that the province force oil companies to actually pay their taxes.
“In our municipality, last year and the year before, it’s about $2 million annually that we’re not getting,” Harris said.
“So between the $4.1 million and the unpaid taxes, that’s about $6 million out of a $15 million budget. So its a huge hit.”
A response from Minister Allard’s office called the accusations from Notley and the NDP “ridiculous, especially considering their government spent every single day of its mandate looking for new ways to tax Albertans while kicking the can down the road on this important file.”
The statement, from Justin Marshall, press secretary to the minister, continued: “Municipal Affairs Minister Tracy Allard is currently on tour carefully consulting with Albertans to inform her decision on whether any changes should be made to the Assessment Model Review. So far she has reached out to over 200 municipalities across the province, in addition to continued consultation with the RMA and AUMA, to hear their concerns and listen to their ideas.”
“We of course want our oil and gas businesses to be strong and viable so they can invest, create jobs, and pay taxes in our municipalities, but we must also carefully consider the impact a reduction in assessment would have on the municipalities these employers operate in. A balance has to be found to ensure both sides are strong and viable, and that is exactly what we are working towards,” the statement said.
A decision is expected on the proposed changes later in October.