Alberta municipalities asked to 'nominate' oil companies not paying taxes for more enforcement

The Alberta government is asking rural municipalities to send letters pointing the finger at specific oil and gas companies that aren't paying their property taxes — but one rural leader says there's no hope for enforcement.

Municipal Affairs Minister Ric McIver told delegates with the Rural Municipalities of Alberta they aren't happy with the situation either, and that's why the government is looking to get a list of company names that haven't paid up.

McIver, speaking at the Rural Municipalities fall convention Wednesday, said efforts to get that list began in September, when Energy Minister Brian Jean sent letters to those municipalities outlining what information the government was seeking.

McIver said that besides just providing names, rural officials "can nominate a company for increased enforcement."

He said the enforcement can go "as far as the minister directing the [Alberta Energy Regulator to] shut the bad actor down."

But Rural Municipalities of Alberta president Paul McLauchlin said in an interview that the name submission process comes with conditions and that he and other rural officials aren't confident there will be enforcement.

"I'll be honest with you, I'm not even sure it's worth the paper it's written on," McLauchlin said of Jean's letter.

He said before municipalities can provide company names, they've been directed to wait a year after a company misses the payment deadline, and the amount owing per company must meet a certain threshold.

McLauchlin, who is also the reeve of Ponoka County, said those conditions have left officials "tremendously frustrated."

Unpaid taxes are a long-standing issue.

Rural Municipalities of Alberta, which represents 69 counties and municipal districts, estimates oil and gas companies owe more than $250 million in overdue property taxes to rural communities across the province.

The organization has been lobbying Premier Danielle Smith's government for more than a year to address the shortfall.

Although the government has made some policy changes to try and address it, rural leaders peppered ministers with questions about it Wednesday and urged them to go further.

"Why does the provincial government expect municipalities and landowners basically to bend over backwards to make life even easier for companies when many of them don't respect rural landowners or the communities they operate in?" asked Stettler County Reeve Larry Clarke to applause from the crowd of about 300.

"We've been fighting with this longer than we should have," McIver responded. "It's gone on long enough, and maybe longer than that."

McLauchlin said a bigger issue and a bigger concern is the lack of enforcement currently being done by the Alberta Energy Regulator, and whether the province will actually direct the regulator to go as far as shut down companies that have outstanding bills.

"We've heard from the Alberta Energy Regulator that they will not use unpaid taxes as a compliance measure to stop an oil company from operating," McLauchlin said. "Therefore they will not put a company into bankruptcy based upon unpaid taxes or surface leases.

"If the [energy regulator] is honestly saying they have no intention of enforcing then really, what's the point of the conversation?"

In an emailed statement, Jean's office said the name and nominate for enforcement process outlined in the September letter is just one tool being considered, and that the government shares the frustration of rural communities.

Lauren Stewart, a spokesperson for the regulator, said in an email that tax collection and enforcement of municipal taxes is the sole responsibility of municipalities.

She also said the regulator already has been using information obtained by the provincial government about companies with outstanding taxes to enforce policy changes introduced by the government to address this issue in recent years.

One of those policy changes was giving municipalities the ability to recover what's owed to them through liens placed on companies during bankruptcy or insolvency proceedings.

The other major change was that the government directed the energy regulator not to issue new oil well licences or licence transfers to companies that owe more than $20,000 in unpaid property taxes in an attempt to stymie company growth while taxes are outstanding.

McLauchlin said if the energy regulator won't shutter oil companies for having outstanding property taxes and municipalities are limited to waiting for payment through bankruptcy proceedings, that leaves rural municipalities to manage a growing funding gap by hiking property taxes on residents, cutting services, or postponing projects.

NDP Leader Naheed Nenshi told reporters he thought the UCP government was "gaslighting" rural municipalities by asking them to name companies they think should face regulatory punishment.

"This one industry is being treated differently than every homeowner and every other industry in the province," he said.

"Paying your property taxes is the cost of doing business, and we have to have mechanisms in place that ensure that municipalities are getting what they deserve."