BONNYVILLE – MD of Bonnyville council wants to make sure the provincial government hears their concerns about the proposed changes to the assessment model for oil wells, pipelines, and machinery and equipment.
Council voted in favour of sending a letter to the province during their Aug. 12 meeting. Reeve Greg Sawchuk said any of the three scenarios proposed by the province would have a significant impact on the municipality.
“We have to encourage a lot of our residents to bring this up and put it forward because everyone’s going to pay the price,” he stated. “Everybody will be paying the price and it will be spread out over into our urban neighbours as well. This hit would be hard to swallow for us, for sure, and for a number of municipalities, it’s dire.”
Alberta Municipal Affairs Minister Kaycee Madu previously told the MD in a letter that how they assess the values of these assets, including oil and gas wells, for taxation purposes hasn’t been changed since 2005 and that the province has been reviewing assessment models to ensure there’s a "transparent and fair distribution of taxation."
Although it was anticipated a final decision would be made in the spring, the province has pushed it back until later this year.
Based on the scenarios given by the province, MD administration anticipates they could lose anywhere from $8.9-million to $13.9-million loss of revenue.
“To offset this loss, we would be required to increase the residential tax rate by between 169.4 per cent and 262.7 per cent, the non-residential tax rate by between 18.5 per cent and 32 per cent, or reduce full-time employment by between 43.6 per cent and 67.7 per cent,” Sawchuk stated in the letter being sent to the province. “Raising tax rates to offset the impacts of the assessment model change will have the effect of simply transferring taxes from the oil and gas industry to all other businesses and residents.”
Sawchuk went on to say that while the MD understands that municipal property taxes have proven to be a significant burden from some oil and gas companies, that isn’t the case locally.
“It's not the case up here. We know that, from CNRL presentations to us, their costs as far as municipal taxes are around that one per cent area.”
During Premier Jason Kenney's visit to the Lakeland, he noted in a sit-down interview with LakelandToday.ca that he believes rural municipalities are "jumping the gun" when it comes to their reaction to the proposed changes.
"They're not easy issues, but we will listen to municipalities . . . We're not going to do anything that is radical,” Kenney said during the interview. “We're not going to massively undermine the revenue base of the RMs (rural municipalities). At the same time, we would ask those RMs, especially in the south and east of the province, to look at what they can do to help us avoid mass bankruptcies in the business."
Sawchuk joined other municipal leaders at a protest in Lac La Biche during Kenney's visit, to raise their concerns. He also discussed the topic when he sat down with the Premier.
“I told the Premier I never thought that I would be one to be out there at a protest or a demonstration, and I certainly didn’t see myself as an elected official demonstrating on the stairs of his house, but we feel that this issue was strong enough that we had to.”
If the changes go through to help the companies, MD council was hesitant they'd see any benefits coming back to the municipality.
“The oil companies are going to benefit from it, but there’s no guarantee that’s going to help this area at all,” stated Coun. Dana Swigart. “It doesn’t mean they’re going to invest that extra million into this area, so it’s not great for us.”
A major concern for Coun. Mike Krywiak was that all of the scenarios didn’t include what the impacts could be in the future.
“I think in future years, we’re going to be losing a lot more money but we’re just not being told anything.”
