More than 200 energy industry companies owe nearly $254 million in unpaid taxes to Alberta municipalities, says a new survey by Rural Municipalities of Alberta.
The number is virtually unchanged from 2023 when nearly $252 million in back taxes were owed. This is the seventh year of the survey that highlights the continuing failure of oil and gas companies to clean up their tax bills.
"While we recognize and appreciate the Government of Alberta's well-intentioned efforts to address unpaid oil and gas taxes, the problem continues to worsen," said RMA president Kara Westerlund in a statement Wednesday.
"Year after year, rural municipalities present clear, documented, and verifiable evidence that oil and gas companies are wilfully avoiding their property tax responsibilities. Yet, year after year, this issue persists due to a lack of proper industry regulation and accountability," says Westerlund, a councillor in Brazeau County, which is centred around Drayton Valley.
Other property owners who try to dodge their taxes face stringent penalties for non-payment. However, oil companies have been taking advantage of legislative and policy gaps to wriggle out of their tax obligations, says the RMA. About $100 million is owed by companies that are operating.
The association representing 69 counties and municipal districts is calling on the province to set up a working group to create a Property Tax Accountability Strategy to address the tax issue.
"After years of advocating for solutions, the RMA recognizes the complexity of the issue and the need for a collaborative approach that involves municipal, provincial, and industry stakeholders," says RMA.
The working group would focus on closing legislative and enforcement gaps and produce a joint report with specific actions and strategies to make companies pay up. Changes to government regulations meant to encourage companies to settle their bills have had almost no impact.
RMA says it is pleased that Municipal Affairs Minister Ric McIver and Energy and Minerals Minister Brian Jean appear willing to get on board with an accountability strategy.
"As we work to address the ongoing issue of unpaid oil and gas taxes, a collaborative approach between government and municipal stakeholders is essential. By coming together with key partners, including the provincial government, industry, and other relevant stakeholders, we can develop practical, effective solutions that not only recover unpaid taxes but also ensure accountability and long-term sustainability for all of Alberta’s municipalities," says Westerlund.
The RMA wants to see municipalities get more lien powers to pressure companies to pay their taxes and for the government to prohibit companies with big unpaid bills from getting well licences. As well, a system needs to be set up to make it easier for municipalities to report tax arrears for enforcement.
Detailed company data collected as part of the RMA survey showed the 10 worst offending companies owed $67.3 million to 18 different municipalities. The biggest culprit owed $27 million to 19 municipalities.
The average unpaid tax bill for municipalities is just under $4 million and seven municipalities are owed more than $10 million.
Since 2015, Alberta municipalities have written off more than $200 million in taxes they gave up hope of ever collecting.
"Unpaid property taxes are a pervasive issue that extends far beyond just a few isolated cases. This problem is widespread, with responsibility falling on companies across the industry and impacting municipalities on a significant scale," says Westerlund.
"It is crucial that we recognize the scope of this challenge; it is a systemic problem with how the industry is regulated and held accountable, that requires immediate attention and collaborative action to resolve."
