Alberta to force oilpatch to pay up for taxes owed

EDMONTON — The Alberta government is taking steps to force oilpatch companies to make good on their unpaid municipal taxes, including sending reminders from provincial cabinet ministers to those in arrears.

"Our goal is to reduce unpaid taxes throughout the province," Energy Minister Peter Guthrie said in a release.

Earlier this month, Rural Municipalities Alberta released figures showing that energy firms owed $268 million in back taxes in 2022, a figure that is up more than six per cent from 2021.

The pace of nonpayment has also increased. There was $53 million left unpaid last year, up $15 million from the previous year.

In addition, the organization said its members have written off another $150 million in unpaid taxes as unrecoverable.

On Monday, Guthrie said he's issued an order that blocks companies from acquiring or transferring licences on wells or other assets if their unpaid taxes exceed a threshold amount. That threshold is yet to be determined and is to be set by the Alberta Energy Regulator and Alberta Municipal Affairs.

Alberta Energy and Alberta Municipal Affairs said in a release that once the threshold has been established, companies that don't meet it will be targeted for collection.

"This problem has lingered for far too long, and while some viable companies have started to pay their back taxes, others are still not getting the message," said Municipal Affairs Minister Rebecca Schulz.

Paul McLauchlin, president of Rural Municipalities Alberta, said the move could solve up to 80 per cent of the problem.

"I would definitely give the program an A," he said.

McLauchlin acknowledged that setting a threshold instead of requiring companies to simply pay what's owed is a compromise. Despite recent high oil prices, McLauchlin said many energy companies are struggling to survive.

"We've got some fundamental realities in this industry — excessive liabilities and low asset values. We understand the struggles folks are in."

McLauchlin said Monday's announcement at least sets out some guidelines and best practices for making good on unpaid taxes.

He added that both Guthrie and Schulz have said they will personally communicate with the heads of non-paying companies to tell them it's time to settle up.

"(Companies) are getting extreme pressure to correct their books," he said.

This report by The Canadian Press was first published March 20, 2023.