The province of Alberta announced Monday it will order that any oilpatch company that owes unpaid municipal taxes will not be able to receive a new license or transfer an existing license.
“While most companies pay their taxes regularly and on time, there are a few delinquent companies that owe overdue property taxes. 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,” said Guthrie.
According to the government, companies will be required to confirm their unpaid taxes are below a maximum threshold or that they have a payment plan in place, and will not be able to sell their assets until tax obligations have been met.
Paul McLauchlin, president of Rural Municipalities of Alberta, said while only a small number of oil and gas companies avoid paying their property taxes, the unpaid taxes have “major fiscal impacts.”
“As 41 per cent of unpaid taxes are owed by companies that are currently operating, we are optimistic that this change will have an immediate positive impact in rural Alberta,” said McLauchlin.
The government’s plan will involve creating a maximum threshold of unpaid taxes allowed and compiling an annual list of companies exceeding that amount. Municipal Affairs and AER will work together, said the news release.
“The maximum threshold will be determined after reviewing the AER’s analysis of current licensee information related to unpaid municipal taxes, and in consultation with Municipal Affairs and Energy,” the government said.
The companies on the list will be “targeted by the AER to provide proof of tax payment.”
Municipal Affairs has also restored a special lien process, which the government said will give municipalities priority over other creditors.
In a 2022 Unpaid Oil and Gas Property Taxes survey, the Alberta government said a cumulative total of $220 million in unpaid taxes has been reported by municipalities, with $130 million in tax arrears (including penalties and interest), and the $90 million in cancellations.
“Many of these taxes will not be recoverable outside insolvency proceedings because they are owed by companies no longer operating or because the taxes have already been written off by municipalities, or both,” said the government.
There is $76 million potentially recoverable from companies still in operation.
Municipalities state they have repayment plans for $48 million in unpaid taxes, and could recoup another potential $28 million from companies currently in operation.
