Rural residents have reason to celebrate a new directive issued to the Alberta Energy Regulator (AER) that requires oil and gas companies to pay taxes owed to municipalities when approving licence transfers or new licences.

“While most companies pay their taxes regularly and on time, there are a few delinquent companies that owe overdue property taxes," states Guthrie."That is why we’re putting in place this ministerial order – to continue building on our recent work. Our goal is to reduce unpaid taxes throughout the province.”

It was coupled with efforts to aid counties in recovering a little over half of the $130 million in tax arrears, including penalties and interest. Municipal Affairs minister Rebecca Schultz followed up on her commitment made two weeks ago to explore the issue and find solutions.

“Our government is serious about addressing the ongoing problem of unpaid municipal taxes," states Schultz. "This problem has lingered for far too long, and while some viable companies have started to pay their back taxes, others are still not getting the message. This direction to the AER will have real consequences for those delinquent companies. In Alberta, we pay what we owe, and it’s time to pay up.”

Of the cumulative $220 million in unpaid taxes that have been reported to the Alberta government by municipalities, there remains $130 million in tax arrears (including penalties and interest) and $90 million in cancellations

After discounting taxes owed by companies no longer in operation or already written off by rural municipalities, the government estimates there remains $76 million that could potentially be recovered from companies still operating.

Municipalities have reported to the government that they already have repayment agreements in place to help collect $48 million in unpaid taxes, and there is further potential for municipalities to recoup another $28 million.

Although it may only be a portion of what is owed, Rural Municipalities Association (RMA) president Paul McLauchlin calls it a win for rural Alberta.

"It's very good news," says McLauchlin. "It's like Christmas in March for me, so it brings me joy."

He believes it's an important step forward toward establishing a more permanent solution.

"I think that this is a bold step by this government to start to put less money at risk to rural municipalities to create some certainty. Our long game is to ensure that the payment of taxes becomes a regulatory requirement, and that way this will never happen again. But this is the first step, and I'm quite optimistic and confident that this will at least push this file forward quite significantly."

McLauchlin says they will be working together with Municipal Affairs and AER to create an annual list of companies that will be targeted to provide proof of tax payments.

"The first step is a commitment to start to work together and make sure that we're dealing with two key pieces of information. What exactly are the numbers? What are the companies and what is the makeup of how those numbers are generated and what do those numbers actually represent?"

Two weeks ago, RMA released the results of a members' survey which indicated the situation has worsened since they started collecting the data five years ago. As of December 31, 2022, the survey indicated approximately $268 million in property taxes is owed to rural municipalities, 6.1 per cent higher than in 2021, and 231.5 per cent higher than in 2018.

McLauchlin says they originally identified the problem seven years ago, and two years later began the annual survey.

"We've gone public for the last three, and we've seen numbers from the last year which shocked me. You'd think I'd have the pulse of this, but I had nowhere near the speculative thought that we'd have the highest level of unpaid taxes in 2022 when we had such a strong commodity price and free cash flow in what was truly probably one of the best years in many years in the oil and gas industry."