By Shaun Penner

County of Grande Prairie Reeve welcoming return of special lien powers on oil and gas properties

Nov 1, 2021 | 3:32 PM

GRANDE PRAIRIE, Alta. – The Reeve for the County of Grande Prairie is welcoming proposed changes to the Municipal Government Act which will once again allow municipalities to place a special lien against oil and gas companies who have unpaid taxes.

The amendments, tabled in the legislature Thursday by Minister of Municipal Affairs Ric McIver, come as a recent survey by the Rural Municipalities of Alberta (RMA) found approximately $245 million was owed in back taxes by oil and gas companies to rural municipalities.

READ MORE: MGA amendment aims to help municipalities collect unpaid oil and gas company taxes

Leanne Beaupre says the County of Grande Prairie is not immune from that total.

“I know our association (the RMA)… have been advocating to our MLAs and to the minister and to the Premier, that this is a real concern for municipalities, as taxes are our only instrument that we can collect that pay for programming and operations and capital projects,” Beaupre said.

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“For municipalities, those really are the only revenues that we see other than grants from federal and provincial governments. So, not being able to collect some of that tax money from individuals has really put a strain on many municipalities.”

With the ability to place the lien against such companies restored, Beaupre says it will allow municipalities to become a secured creditor, a group which has had priority over municipalities when a company would become insolvent.

Beaupre says this left municipalities with little left to claim, if anything, if a company went bankrupt.

“This actually allows us to, you know, for as little amount of money that we may collect from (them), at least we’ll be able to collect some of that as one of the secured creditors,” said Beaupre. “At least we would be a creditor (who) would see some revenues from that sale or forfeiture of land or equipment.”

In 2020, Beaupre told EverythingGP the County of Grande Prairie was owed in the range of $2 million in unpaid taxes from oil and gas companies.

However, she says a year later that figure has been worked down to about half that amount.

“We have had one industry partner come to the table and make arrangements to pay their back taxes, and actually has made very admirable steps to getting it so that they’re actually paid up,” Beaupre said. “So, I would say we’re still owed about $1 million. And (that total) would mostly be from companies that have been insolvent.”

While she feels this announcement is a great step forward in giving municipalities a greater ability to collect unpaid taxes, Beaupre adds more advocacy work is ongoing to bring about even more security for municipalities.

“We’ve asked the province even to consider, you know, any new leases to some that are presently operating but haven’t paid their taxes,” she explained. “So, anything that requires regulatory approval, that the province actually checks to see if they are owing taxes so that they can’t continue to accumulate more taxes (owing) without paying what they owe already.”

Beaupre adds she knows this is not reflective of the vast majority of oil and gas companies, but as a major industry even the few who do not pay their taxes on time can really leave a dent in a municipalities budget.