BARRHEAD - No dice.
County of Barrhead councillors denied a request during their April 5 meeting to cancel close to $28,000 in unpaid taxes from Axiom Oil and Gas.
In a letter, Axiom's vice-president of finance Don Earl said the energy company was unable to pay its full tax bill, which as of March 1, is in arrears of $180,739.39.
Instead, he proposed that the company be allowed to pay a one-time payment of $152,817.59, writing off $27,921.80.
Finance director Tamara Mozahn said that Alberta's Municipal Government Act does give municipalities the authority to defer, reduce or cancel taxes. However, she recommended that councillors deny the request.
She gave credit to the company for continuing to make payments toward their tax bill, which has been in arrears since 2018.
In 2018, Axiom paid the majority of its $33,304.68 tax bill, leaving a balance of only $984.64, but in 2019 and 2020, the percentage they paid towards the taxes they owed, including penalties, dropped significantly. In 2019, Axiom made a payment of $130,641, leaving an outstanding balance of $213,697.44. In 2020, they paid $38,003.12, leaving an outstanding balance of $533,952.35. In 2021, the company made its largest payment in four years of $308,000, but that still left an outstanding balance of $502,379.54.
In 2022, Axiom made a $200,000 payment and when it was combined with the $135,439.29 the county forgave as part of an agreement for work Axiom did to properly shutter their oil and gas well site on a lot at the county's Kiel Industrial Park, that left a remaining tax bill of $180,739.39.
Molzahn noted the province recently gave municipalities more tools to collect outstanding taxes from energy companies through the adoption of Bill 77: Municipal Government (Restoring Tax Accountability) Amendment Act.
The legislation gives municipalities the ability to use special liens to recover unpaid taxes on oil and gas properties. It also placed property tax liability on both the owner and operator of oil and gas assets.
This power, Molzahn said, was not available to municipalities after a 2019 Supreme Court of Canada (SCC) ruling and subsequent Alberta Court of Appeal decision.
The result was that municipalities were made unsecured creditors, giving them little ability to collect unpaid taxes from energy sector companies.
"Accepting this proposal could set a precedent for all energy companies and all taxpayers but more specifically jeopardize tax collection in the oil and gas sector," she said.
Molzahn also referred to a statement that Premier Jason Kenney made at the recent Rural Municipalities of Alberta (RMA) convention.
"‘You've been very patient. Patient through the tough years when so many companies, especially the mature dry shallow gas producers, were barely able to stay afloat ... but at these commodity prices, there are no more excuses,’" he said. "‘These companies must pay what they owe, period.’"
She added that Axiom could also use the county's Tax Instalment Payment Plan (TIPP) to help them become current.
Coun. Bill Lane reluctantly agreed but noted the company did not have to do the work at Kiel. He added that if Axiom did not shutter the well, it would have probably sunk the sale of two lots at the Kiel Industrial Park.
Later in the meeting, county manager Debbie Oyarzun announced the municipality finalized the sale of two Kiel lots to GFR Ingredients.
Reeve Doug Drozd said while he applauds Axiom for working with the county to shutter their gas and oil site, current gas prices do not justify having unpaid taxes.
"I am glad they have been such good corporate citizens, and I hope they continue to do so, but right now, natural gas is hovering around $5 on the 30-day future market, so they are making out pretty good. And we are hard pressed to forgive our residents and businesses who have made similar requests.”
Barry Kerton, TownandCountryToday.com
