Rural Alberta frustrated with oil and gas 'bad actors' not paying tax as industry swims in cash

As questions loom about how Canada's oilpatch will spend its record profits, Alberta's rural municipalities are once again calling for what they're owed in outstanding property taxes.

Jason Schneider, a director with the Rural Municipalities of Alberta (RMA), says the oil boom is good news, and the majority of companies are paying their municipal taxes. But he adds there are still some "bad actors" out there who continue to operate and make record profits while not paying taxes.

"Unfortunately, with the way the legislation is, there's a few of them that are able to slip through the cracks and take advantage of the situation," said Schneider, who is also the reeve of Vulcan County.

"And it's quite frustrating from the municipal law standpoint, because our position is that if you can't afford to pay your taxes, you should not be operating in Alberta, period."

When asked, Schneider said the RMA wouldn't name the companies, adding it would be left up to individual municipalities if they wanted to "name and shame" the delinquent operators.

The RMA said in March that tardy oil and gas companies owed municipalities $253 million in unpaid taxes, up from an estimated $173 million in early 2020. Schneider said that number is updated once a year, and said he's cautiously optimistic that the next figure posted by the RMA will be significantly lower.

In late 2021, the Alberta legislature passed a bill that allows municipalities to place a special lien on owners and operators of oil and gas companies that haven't paid their taxes.

The Alberta Energy Regulator has also revised its licence eligibility requirements to include a financial health review, with a goal to assess whether a company can meet its financial obligations should it operate in the province.

A spokesperson for Alberta Municipal Affairs Minister Ric McIver said the ministry expects it may take some time before the results of those efforts can be borne out.

"Municipalities have begun exploring the special lien provision to encourage oil and gas companies to pay their outstanding property taxes," said Scott Johnson in an email. 

"We are partway through the first municipal tax year with this legislation in place. We will continue to monitor this issue, and we are hopeful that the legislation and our greatly improved economic climate will bring this to a positive resolution."

The Opposition NDP accused the provincial government of not listening to rural Albertans, given McIver's acknowledgement in March that the legislation hadn't been effective enough in getting companies to pay.

"When companies fail to pay their local taxes, it pushes more costs onto homeowners, who are already struggling with the worst affordability crisis in 40 years," reads a statement attributed to NDP municipal affairs critic Joe Ceci. 

"It's been six months since UCP Minister Ric McIver admitted that his plan to fix this problem had failed, but we've seen no new progress at all since then."