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In late July, the Provincial Government released 4 scenarios for changes to the way that oil and gas wells are assessed for property taxes. As a County resident, you may have heard about these changes but are wondering how you could be impacted by an industry that has relatively small holdings in the County (compared to other municipalities such as the MD of Wainwright or Strathcona County).
A property’s assessment determines the amount of property taxes you pay to the County. The County’s total assessment base for the 2020 tax year is $1.2 billion. Farmland contributes 9% of the total, residences contribute 51%, non-residential contributes 8%, and the balance of 32% is from oil and gas properties.
Although the oil and gas industry only contributes 1/3 of the total assessment base, because they are taxed at a higher rate, they pay almost $7 million of the total taxes collected by the County (over 50% of the total).
The Government’s proposed changes to the oil and gas assessment could mean that the industry will pay up to 43% LESS in taxes.
If the oil and gas industry isn’t paying their share, who is?
YOU WILL BE PAYING MORE to offset the amount that the oil and gas industries are not paying. In the worst case, you could be paying up to 103% more (residential) or 58% more (non-residential) in taxes.
County Council recognizes the significant negative impact such a spike in taxes will have on property owners. To adjust for the loss in revenue, Council will be faced with difficult choices. They could be forced to reduce expenses by 15%, cut staff by 64%, increase taxes, or implement a combination of these options.
Any reduction in expenses or staff reductions will mean a change in the level of services to which you are accustomed. It may also have a substantial impact on the towns and villages in the County. The County may no longer be able to maintain the level of grant funding it has been paying to our urban partners to provide quality-of-life services that we all enjoy, such as fire protection, emergency services, recreation, and library services.
Unfortunately, the County is not able to simply increase the mill rate on oil and gas properties to recoup the taxes lost. The Municipal Government Act restricts the non-residential mill rate to no more than 5 times the residential mill rate. The County’s current mill rate ratio is approximately 4:1. While there is room to increase the non-residential mill rate, it will not be enough to recoup $3 million of lost taxes.
YOU WILL BE IMPACTED AND YOU CAN HAVE YOUR SAY !!
County Councillors are reaching out to the MLAs to express their grave concern and request that the changes be reconsidered. You can lend your voice to this effort by contacting your MLAs, Jackie Lovely at 780-672-0000 or email@example.com or Rick Wilson at 780-360-8003 or firstname.lastname@example.org.
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