By Collin Gallant
Alta Newspaper Group – Medicine Hat
Three MLAs in southern Alberta say they are pushing for a pause on linear tax assessment changes that rural leaders say would hammer their budgets due this fall.
But they also say the system to assign valuation to oil and gas infrastructure needs to be updated, and less tax revenue from the oilpatch – and therefore budget constraints – may be inevitable at some point.
MLAs Drew Barnes, Michaela Glasgo and Grant Hunter all told Alberta Newspaper Group reporters that they support a “relational reset” that’s occurring right now as a new Municipal Affairs minister stages meetings on the controversy.
Glasgo, MLA for Brooks-Medicine Hat, said those meetings are part of new talks with local officials that can lead to a solution.
“We need to get this done properly with robust consultation,” she said. “We can not rush this.”
New Municipal Affairs Minister Tracy Allard held a mass meeting with southern Alberta county officials in early September and recently met in Stettler with central Alberta counties.
Since this summer, rural Alberta’s local elected officials have sounded alarm bells that any of four options proposed to modify how tax bills of wells are calculated could put mean heavy tax increases on other residents and businesses.
“October is too soon to dramatically change the revenue from oil and gas assessments,” said Barnes, MLA for Cypress Medicine Hat. “While all levels of governments, spending and taxation must be reduced and reviewed with utmost efficiency, (linear) assessment … needs to be changed to fluctuate with the value of the underlying commodity.”
Petroleum producers have argued that out-dated assessments don’t consider the realities of a depressed energy sector, and without lower costs, like property taxes, the industry’s viability is threatened.
Barnes called the update a matter of fairness, but said a longer timeline of four years to phase in changes was needed to avoid “chaos” in county budgets.
Grant Hunter, MLA for Taber-Warner, including the County of Forty Mile, said earlier this month that combined with higher rural policing costs, COVID-19 response, and other factors weighing on budgets, more substantial changes should be avoided.
“I’m obviously just one voice in our cabinet and caucus, and the minister will have to make the final decision, but I’m advocating that we do not do it at this time,” he said.
Cypress County and the County of Newell say the changes would amount to decreased revenue of $7.8 million and $11.6 million, respectively.
That equates to about a 20 per cent drop in both cases.
Both say they can’t absorb that in operational cuts, and major tax hikes would be needed in budgets that are now being drawn up.