By Alex McCuaig

Area reeve seeks balance on oil and gas tax assessment changes

Oct 14, 2020 | 5:02 PM

MEDICINE HAT, AB – After weeks of dire predictions of service cuts and huge tax increases in rural municipalities due to provincial charges in how oil and gas company infrastructure is taxed, there appears to be some optimism over the final decision expected later this month.

In July, the provincial government released four proposals on tax assessment reform on oil and gas infrastructure. They caused a furor among rural municipalities across the province faced with potentially huge cash shortfalls.

In worst-case scenarios, Cypress County says the changes could see a farm property tax rise by more than 1,500 per cent to make up the difference while the County of Newell could see a third of its property tax revenue wiped off its books.

The price to boost the struggling oil and gas sector shouldn’t be born solely by rural municipalities, says Newell Reeve Molly Douglass.

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“We don’t have anything against looking at reviewing the assessment models but it needs to be done in an open and transparent manner with the appropriate people at the table and it can’t be a rushed sort of process,” said Douglass.

She says a meeting in Lethbridge in September with newly appointed Minister of Municipal Affairs Tracy Allard marked a shift in the discussion which started in July when the province first proposed four versions of tax assessment changes.

But there needs to be balance in how those changes are made, says Douglass.

“If we are going to continue with an oil and gas industry, we also have to continue with rural municipalities,” said Douglass. “We can’t do away with one. We need each other and we want to support the sustainability of the Alberta oil and gas industry but not at the expense of our own municipality.”

Tarolyn Aaserud, Cypress County chief administrative officer, says recent discussions on the tax assessment changes have been encouraging.

And she anticipates those changes will be announced soon as municipalities will need to have revenue projections in place prior to budgets being due at the end of the year.

“The economy has changed and we need to be partners in the solution and that there are many stakeholders in that solution,” said Aaserud. “We just want to work together with everybody.”

Rural municipalities have also noted these changes come on top of increased policing cost from provincial decisions as well as the 2019 provincial Shallow Gas initiative which reduced revenue for municipalities.