Should changes be made to the provincial government's assessment model for oil wells, pipelines, machinery, and equipment, property owners in Rocky View County (RVC) could be facing up to an eight per cent increase in taxes.
Worse than that, it could mean some counties will not survive, says RVC Reeve Greg Boehlke.
The Alberta government is currently considering several options relating to possible changes to the assessment of wells, pipelines, and machinery and equipment (M&E) properties. The government says the changes are intended to support the competitiveness of the oil and gas industry while ensuring the ongoing viability of municipalities.
RVC Reeve Greg Boehlke is flabbergasted by the proposed change that could be decided upon over the next few weeks.
He says indications are the preferred option will leave some counties in financial ruin.
"The supposedly preferred option for Municpal Affairs is option 4, which is the most extreme. That is going to really devastate a lot of municipalities. It could mean some will have to hand in the keys, and there doesn't appear to be much concern about that. I don't know what they're going to do when these municipalities start folding up the tent."
He says there has been little consultation with counties for the Alberta government to grasp its devastating impact on counties provincewide. He says those tax dollars are crucial to core services, like roads, police and fire, and their loss would mean either cutting core services or substantially raising taxes for both residential and commercial property owners.
He says it's unfair governance to download further costs to municipalities and their ratepayers..
"I don't think this fight is going to go away easy. I think the whole province and our association is very upset with the process, the lack of consultation, and lack of input, and then the timing to make a decision in August when people are gone for holidays."
Boehlke believes the push for the change is a kneejerk reaction to the massive downturn in oil and gas market. He says there's no evidence that the money will stay in Alberta or create jobs.
He believes the only thing that will improve the market is finding a way to get more product to market, and even that is hindered by low commodity prices. He says the US is our major customer and that they currently have more than enough oil and gas to meet their needs, especially since the onset of COVID-19..
"We're looking at a market situation, more than an assessment situation," says Boehlke.
While support of the industry, Reeve Boehlke says changes to the assessment model is yet another financial blow to municipalities by the province.
“We’ve seen the province download costs to municipalities, take a bigger share of municipal revenue, and now we’re being asked to forgo revenue from our largest industry. We’re fully supportive of Alberta’s work to open markets, build pipelines, cut red tape, and improve the oil and gas industry’s positive profile, but we are deeply concerned about changes that shift costs on to average taxpayers and business owners.”
Boehlke says the counties have been fighting the proposed change and welcome ratepayers to do the same by reaching out to their MLAs and government ministers.
The Rural Municipalities of Alberta (RMA) say the proposal is short-sighted.
"The options currently being considered by provincial decision-makers reflect a lack of focus on the important role of property taxes in municipal operations, including to provide the infrastructure and services that the oil and gas industry relies on," RMA states in its advocacy position.
If a decision is reached, it could come into effect in the 2021 fiscal year. That means it could impact next year's taxes.