Representatives from Canadian Natural Resources have requested the County of St. Paul consider a 30 per cent reduction in property taxes, given the current economic slump being seen in the oil and gas sector.
“Last year, 2015, was a pretty challenging year,” said Cam Wietzel, with Canadian Natural, when speaking to council on March 8. “We’re facing a crisis in our industry.” He explained that in his area, which is more the gas side of things, property taxes make up about 20 per cent of operating costs.
He said he feels that Canadian Natural has shown its commitment to the community throughout the years, supporting a number of local causes. Right now, CNRL has 171 operators working in the area.
Although Canadian Natural has abandoned some wells in the area, there are still over 1,000 wells in the area. Since 2011, prices in the oil and gas sector have been on the decline. There was a bit of resurgence in 2013, said Wietzel, but those numbers have been dropping again.
In 2013, three of the major Canadian Natural projects in the County of St. Paul that Wietzel spoke about were sub economic. Although Wietzel was speaking more about the gas side of things, he said the oil side was in a similar situation.
Right now, Canadian Natural is shutting down about 10 wells a week, said Andy Astalos, who is a superintendent also with Canadian Natural, but deals with the oil.
Following the presentation, Coun. Glen Ockerman offered some thoughts to the representatives. He explained that when prices were higher, and oil/gas companies were paying employees high wages, it proved difficult for the County of St. Paul to attract quality employees, which in turn resulted in a higher cost of doing business for the municipality, which calls for higher taxes.
“We had to increase taxes to continue to provide services,” said Ockerman. “We were competing with industry every turn we went.”
It was industry that drove up the municipality’s costs. For example, finding plumbers and electricians was difficult since many were working in the oil/gas industry.
Ockerman did agree that Canadian Natural has been very supportive of the St. Paul community.
“There was a huge demand on people,” said Wietzel, adding, many Canadian Natural employees are now taking pay cuts as the industry realigns itself.
Coun. Frank Sloan also commented on the delegation, saying, as a farmer, he has been through some tough years, but in the end he always paid his taxes. The Sloan family has been raising cattle in the area for a number of years, he explained, adding, when BSE came around, it was hard to stay in the industry.
“We did what we could for the farmers, but they always paid their property taxes,” said Sloan.
Wietzel said he did not want the request to come across as a threat, but the reality is that once projects become sub economic, they will be shut down. He said he felt it was his company’s responsibility to share with the County of St. Paul where it stands.
CAO Sheila Kitz said that she has had conversations with some of Wietzel and Astalos’ colleagues, and at time explained to them that it would be a good move for the oil/gas companies to be on the rural municipalities’ side if changes take place in regards to linear assessments in the Municipal Government Act. The proposal is to split linear taxes between rural and urban municipalities.
“We’re all caught between a rock and a hard place,” said Kitz. She added that she believe rural municipalities do try to be good neighbours to urban municipalities, supporting them when they can. But if the changes occur, the difference in income from linear assessments will have to be made up in other ways.
A motion to defer the request to budget meetings was carried.
