By Shaun Penner

"Massive Budget Shortfall"

Birch Hills County calling on oil and gas industry to make good on unpaid taxes

Mar 5, 2020 | 1:44 PM

Birch Hills County is calling on oil and gas companies operating within its boundaries to pay up on their tax bills.

Birch Hills Reeve Gerald Manzulenko claims a recent audit of 2019 financial statements shows the County is owed about $552,000 in unpaid taxes from oil and gas companies in 2019. Most notably, he and the County are pointing the finger at Long Run Exploration. The County claims Long Run owes $482,000 of that total for 2019.

In a relatively small municipality like Birch Hills, whose tax base totalled $5.7 million in 2019 across it’s approximately 1,600 residents, that figure is rather daunting.

How the County plans to make up for that difference remains to be seen, should they not be able to recover that shortfall.

“We’re (council) going to be having discussions over the next month or better to get some sort of plan in place, and I think we are going to be looking at everything,” said Manzulenko. “Whether it’s (an increase to) taxes, cut services. We just have to look at everything.”

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Those unpaid taxes add to other costs being downloaded to the County ahead of 2020 budget deliberations. Manzulenko says a decrease in assessment values of Linear properties and Machinery & Equipment will lead $157,000 less revenue for 2020.

Add that to the additional $27,000 the County now has to pay for policing this year following provincial funding changes, among other changes, the County is looking at having to raise and additional $746,000 through taxes this year. That’s an increase of 13.2 per cent from last year.

“Anything that we don’t pick up, we somehow have to pass on to our ratepayers, or cut services. Or, do something in order to balance the budget.”

The claim against Long Run comes after a report released earlier this year by the Rural Municipalities of Alberta shows that oil and gas companies owe approximately $173 million in back taxes province-wide.

Long Run Exploration, a Calgary based company, has several operations across the Peace Country. In a release sent out by Birch Hills Thursday morning, they claim that the taxes owed to them by the company is just part of a larger total they owe province wide.

“Calculations based on Long Run’s 2018 tax payments and queries to other municipalities point to Alberta Municipalities being owed in the neighbourhood of $10.8M by Long Run related to 2019 taxes.”

The County also claims they have not received any information from Long Run, as to whether or not they plan to pay their tab. In the meantime, Manzulenko is hoping to get the word out about just the significance of unpaid taxes from the oil and gas industry.

“We can only hope that additional companies operating in the County do not follow Long Run’s lead, as we do not have the same options available to us in dealing with these accounts that we do with delinquent ratepayers related to titled properties,” said Manzulenko. “Birch Hills County, and others, need leadership from the Provincial government to deal with these companies.”

EverythingGP has reached out to Long Run Explorations for comment on the matter. As of press time, we have not received a response.

Manzulenko is hoping it doesn’t get to the point where the County has to make up their shortfall through their other ratepayers. Outside the oil and gas industry, agriculture is their largest tax revenue source. After a tough couple of years of harvests, he knows that isn’t an easy ask of them.

“There is still crops and everything out in the fields. The way everything is going, the economy and everything, it’s a tough uphill battle.”

He adds that he wanted to get the message out to the ratepayers of the Birch Hills, so they can brace themselves for the realities of this year’s municipal budget.

“There is no clear path out of this problem, and we are going to have to make some tough decisions if we are going to continue to function as a viable municipality in the Province of Alberta.”