Big Lakes County was notified of changes proposed by the Province of Alberta to reduce the property tax of oil and gas companies through changes to the assessment model for regulated properties in this sector.
Council and administration are extremely concerned about the serious impacts of this decision because it will result in an increase in property tax, reduction of services, or more likely a combination of both to make up for this lost revenue.
Big Lakes County is home to many oil and gas companies and recognizes that a healthy oil and gas industry benefits all Albertans. While the stated intention of the proposed change is to increase the competitiveness of oil and gas companies in this hard time, these changes will disproportionately benefit large oil and gas companies and harm our smaller local operators. In addition, the proposed changes include no regulations to ensure that money from the reduction in taxes will be spent in Alberta to improve the struggling oil and gas sector here. There seems to be few benefits to outweigh the added costs that County residents will be faced with. Put simply, the proposed changes are not the answer.
There are four possible scenarios that are being presented by the technical committee (made up of Industry representatives and government advisors). Based on the information provided to Big Lakes County from the Province, the impacts to Big Lakes County from the 4 scenarios indicate a loss of up to $381 million in lost assessment, which equates to between $1 million and $5.6 million in overall lost revenue for Big Lakes County in the first year with increasing revenue losses in subsequent years. This loss represents up to 24% of Big Lakes County’s net taxation revenue, or 20% of the County’s total operating revenue.
To compensate for the loss of industry assessment and corresponding tax revenue, Big Lakes County will have to adjust operations in one of the following ways (likely a combination of these):
- Increase the residential tax rate between 41% and 217% AND/OR
- Increase the non-residential tax rate (businesses in Big Lakes County) between 6% and 29% AND/OR
- Cut County services by 7% – 69% as a result of lost jobs.
If this proposed change is passed YOU WILL BE IMPACTED – financially through property taxes and in a loss of service from Big Lakes County. Many services provided by the County would have to be cut, County support to our neighboring municipalities (Town of High Prairie and Town of Swan Hills) and community organizations may have to be decreased or eliminated, and there would certainly be an increase in property taxes for residents and business within the County.
The timing of this change is particularly unfortunate for Big Lakes County. In recent years, industry conditions in the oil and gas industry have resulted in significant amounts of property taxes going unpaid. This trend, combined with the additional changes to the Police Funding Model, mean that Big Lakes County is already under financial stress.
The Province is proposing these changes to give reductions in property taxes, and education taxes to the oil and gas industry. This loss in municipal revenue must come from other rate payers – YOU! – either through increased taxes AND/OR decreased services.
WHAT ARE WE DOING?
The County is contacting Premier Jason Kenney, Municipal Affairs Minister Kaycee Madu, Energy Minister Sonya Savage and MLA Pat Rehn to express our concerns over these changes. The County is also supporting neighbouring municipalities and the Rural Municipalities of Alberta.
WHAT CAN YOU DO?
- Please let your government officials know your thoughts on this issue.
- Please call your local Councillor if you have questions about this or want additional information. A list of Councillors can be found on the County website.
- Read the RMA position paper on this Assessment change under Summary Document and Position Statement.