Province creates 'working group' to help tax-strapped rural governments

With the tab for unpaid taxes by resource companies mounting in rural Alberta, the province has formed a new group to tackle the growing problem.

'It's a good first step towards finding out how big a problem this is,' says AAMDC executive

Some rural governments are owed hundreds of thousands of dollars in unpaid taxes by resource companies. (Sue Ogrocki/Associated Press)

With the tab for unpaid taxes by resource companies mounting in rural Alberta, the province has formed a new group to tackle the growing problem. 

In the last two days, the Alberta Association of Municipal Districts and Counties has heard from 10 of its 69 members that are owed more than $500,000 from resource companies, said the organization's president, Al Kemmere.

"It's a good first step towards finding out how big a problem this is," Kemmere said of the working group, which will include representatives from the AAMDA, the Alberta Energy Regulator, and the departments of municipal affairs, finance and education.

Municipal Affairs Minister Danielle Larivee said unpaid taxes are "an emerging issue," and the new group was formed to find ways to address the problem.

Just a week ago, Finance Minister Joe Ceci released a first-quarter financial outlook that highlighted a growing deficit, and said there was little room in the budget to offer reprieves to rural municipalities looking to recoup unpaid taxes.
Al Kemmere, president of the AAMDC, says it's important to find out how big the problem is. ((Twitter))

"I've got a $10.9-billion deficit," Ceci said. "There's not a lot of slack, or room for me as a finance minister, to entertain the challenges that you're talking about."

Larivee said a financial reprieve is one option being considered, but not the only one.

"Whether or not that will be the solution we land on is not necessarily going to be the first thing we look at, but certainly we can look at the options on the table and consider it together and figure out what we can do."

Rural governments aren't alone in facing unpaid taxes by resource companies that have run into financial trouble.

The Alberta government is expected to be left covering a record amount this year for landowners who haven't been paid annual land lease agreement cheques by resource companies.

The Alberta Surface Rights Board said it has received more than 1,000 applications from landowners this year, and expects the government could pay out $4 million to cover missed payments.

Gerald Hawranik, chair of the surface rights board, said before 2015 the government covered about $500,000 in missed payments annually.

Over the years, the province has been able to collect only a small portion of that money from resource companies that went bankrupt, or simply refused to pay.

In the last three fiscal years, Crown debt collection has recouped $40,460 on behalf of Alberta Environment and Parks, said Jo-Anne Nugent, spokesperson for Service Alberta. A total of $121,476 has been collected in the past seven years.