Municipal Affairs Minister Tracy Allard announced the changes via a Zoom call Monday morning (Photo: Government of Alberta)

By Chris Brown

BALANCE FOR ENERGY INDUSTRY, MUNICIPALITIES

Province offers tax exemption on new wells, pipelines

Oct 19, 2020 | 1:04 PM

Alberta is exempting energy companies from paying property taxes on new wells and pipelines for three years as it attempts to strike a balance between industry and municipalities on linear tax assessments.

“Municipalities need a strong oil and gas industry to create jobs for residents, the energy industry needs municipalities to create communities so their workers can live, raise a family and enjoy a healthy quality of life,” said Municipal Affairs Minister Tracy Allard.

The Well Drilling Equipment Tax will also be eliminated and assessments will be lowered for less productive oil and gas fields to keep them viable.

The property tax exemption will be reflected in the 2021 assessed values and applied for taxation in 2022, 2023 and 2024.

Allard said the decision resulted from discussions between leadership in municipalities and industry. She said municipalities have told her they are willing to be partners and she expects them to do all they can to avoid increases to ratepayers.

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READ MORE: Rural municipalities sounding alarm over proposed oil and gas assessment changes

In July, the province released four potential scenarios for its new assessment schedule. Municipalities would have seen losses of between seven and 20 per cent in tax revenue under the plans and urged the province to reconsider.

Allard pressed pause on review when appointed municipal affairs minister later in the summer, seeking to find a balance between the municipal concerns and the energy concerns.

Al Kemmere, president of Rural Municipalities of Alberta, said his group supports the decision in its current form, calling it a much-modified approach to dealing with the challenges faced.

“RMA looks forward to working with the Government of Alberta and industry in the coming years to ensure that rural municipalities can address their viability and continue to do their part to support industry competitiveness in a way that reflects a strong partnership,” said Kemmere.

He added his members will struggle with the incentives announced for industry but says he’s confident they will be willing to come forward to try to do their part for the economy.

The province hopes the changes announced will spur investment in Alberta.

(CHAT News Today)