Rural municipalities across Alberta are raising their voices over millions in back-taxes owed to them by oil and gas companies, and now the premier is speaking out in defense of rural Alberta.
In a campaign-style speech at a Rural Municipalities of Alberta conference in Edmonton Wednesday, Premier Danielle Smith addressed concerns of rural municipalities and families, including a previously announced health-care action plan and modernized schools.
“Rural Alberta has a lot to be optimistic about — incredibly hard-working people, high quality products that the world needs and a deep faith in freedom,” she said.
“We also have a government that believes in you. We will keep on investing to strengthen rural communities.”
One of the biggest issues raised in a Q&A period was about the oil and gas companies that haven’t yet paid their dues to municipalities.
“It’s unacceptable when delinquent companies aren’t paying their municipal taxes,” she said. “It’s just not acceptable and there needs to be real consequences.”
Earlier this week, the province issued a new order for the oil companies to pay their past-due bills.
In 2022, the back taxes owed jumped to $262 million — money that municipalities need for roads and maintenance.
“It’s a huge deal for us,” said Kara Westerlund with Rural Municipalities of Alberta. “Some of the municipalities… this is up to 20 per cent of the revenue they bring in, so that’s substantial.
“When you’re facing that kind of unpaid tax revenue coming in, it trickles down. At the end the day, the residents are left holding the bag.”
She is hoping that by having the province step in, companies will start paying what they owe.
“We’re looking to get a grasp on that and hopefully we can get some of those taxes back out to the residents and to the Albertans that live in that space,” Westerlund said.
The RMA said earlier this month the money owed by energy companies is up more than six per cent from last year and up 261 per cent since 2018, when the association began keeping track.
As well, the rate of nonpayment is increasing. The RMA said there was $53 million left unpaid in 2022 and $38 million in 2021. It’s the third year the municipalities have released a tally of unpaid taxes.
So far, $48 million has been committed in repayment plans, the premier said on Wednesday.
As for the issue surrounding the abandoned wells throughout the province, Smith said there needs to be new directive around who is responsible for well cleanup when companies fail.
She said the province is also looking at a program to ensure the existing abandoned well sites get cleaned up before they start to really impact land-owners’ properties.
“We’re working on trying to find a way to ensure that we’re cleaning up this liability on the oil and gas side, and once people feel comfortable that we’ve got the right model there then the next obvious question is ‘what are we going to do about solar and wind,’” Smith said.
— With files from Saif Kaisar, Global News and Bob Weber, The Canadian Press