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Vol. 15, No. 9, Wednesday, January 29, 2020 www.LamontLeader.com
Oil firm bankruptcies force Lamont STUDENT WINS CHIPMAN LIONS SCHOLARSHIP County to write off over $3 million BY JOHN MATHER At a special meeting of Lamont County council, Jan. 27, it was decided to write off $3,260,367 in back taxes owed the County by non-operating oil and gas companies that had operations in the County. The decision had to be made quickly because the County can apply to receive some of the amount back as credits under the province’s Provincial Education Requisition Credit (PERC) and Designated Industrial Requisition Credit program (DIRC). The deadline to apply for these credits is Feb. 1. County financial officer Roberta Malysh explained to council the County has exhausted all its options of legal appeals to collect the taxes as a preferred creditor. Under the two programs the municipality will be eligible for up to $291,784.52 for the education tax credit and $2,599.54 for the County’s 2020 Designated Industrial Property Tax requisition. The tax credits are retroactive to 2015 under the PERC program and to 2018 under the DIRC program. Malysh told council the amount represents about 16 per cent of the 2020 municipal operating budget. Council had previously cancelled debts on other defunct oil and gas properties in previous years. Council was also going to write off the tax arrears “I have an article from the Rural Municipalities Association and there is close to $173 million in unpaid taxes across the province owed municipalities from bankrupt oil and gas companies,” she said. “They’ve conducted a members survey and it’s estimated that figure is an increase of 114 per cent from what was identified in a similar survey in March of 2019. “We responded to that survey,” she added. She told council there was no way they could collect the back taxes on the
companies involved. Councillor Wayne Woldanski wondered what will happen to future assessments on the properties. Malysh replied, “The province assesses the properties and to the best of my knowledge the department hasn’t be told not to assess them.” She told council municipal affairs will continue to assess the properties until they’re told otherwise. “You have a meeting with the municipal affairs minister coming up and that should be on your agenda.” She said even after the companies went through bankruptcies the County couldn’t recover any back taxes because all monies received had to go towards remediation. “That ruling came last year and we even appealed this to the Supreme Court of Canada but it wasn’t accepted.” She provided council with a listing that outlined every tax owed in Lamont County whether it was on buildings and structures or designated industrial property by the defaulting firms. “It took a week to put this list together and we have to send a copy of each individual assessment notice for each property.” There are close to 300 of the notices that need to be sent to the province. She told council some of the farmers are trying to get remediation of the sites from the orphan well association, but “there isn’t the money to cover those costs.” She further told council the two programs that council is applying for will run until 2021, but no one is sure what comes after that. For rural municipalities dealing with unpaid property taxes from oil and gas companies, Alberta Premier Jason Kenney suggested communities take legal action under the Municipal Government Act to recoup their lost revenue. But he also acknowledged that many
The Chipman Lions Club and the Lions of Alberta Foundation present a $1,000 scholarship cheque to Kayla Boyko on Jan. 21. She will use it to attend the Grant MacEwan University in the Bachelor of Science Program. This is one of two scholarships the Chipman Lions Club contribute to the community every year. Left to right: Terry Cossey, Kayla Boyko, Margaret Boyko and Ross Cossey. companies who haven’t paid their taxes are dealing with bankruptcy and don’t have the money to settle their debts. “They simply don’t have the cash, in some cases, to pay these property taxes, and if these businesses go under there’s no revenue stream from taxation going to these municipalities,” Kenney said Jan. 21. “You can’t wring money from a
stone.” Rural Municipalities Association president Al Kemmere has said he wants to see the province introduce legislation to allow municipalities to collect property taxes before a company goes bankrupt. He added that the inability to collect on corporate property tax could result in higher tax rates for residents or cuts to services.