SANDRA M STANWAY
Brooks Bulletin
Some oil and gas companies continue to be a financial burden on Alberta’s rural municipalities.
In 2024 rural municipalities identified over 200 operational and non-operational companies that are in tax arrears and owe $67.8 million in property taxes. That brings the total owed to rural municipalities to $253.9 million since 2019.
“The issue of unpaid taxes is clearly worsening and the impacts on municipalities are becoming more severe. Companies are increasingly aware of the loopholes at their disposal; something that must be confronted in 2025,” states the Rural Municipalities of Alberta (RMA).
The number of non-operational companies owing taxes to municipalities was larger for the first time in 2024 and accounted for over 60 per cent of unpaid taxes, according to RMA.
“This sharp rise indicates that municipalities are facing even greater challenges in recovering taxes during bankruptcy or insolvency proceedings,” it states.
From 2024, the County of Newell is owed $455,306.67.
“Non-operational companies owe the majority of the balance,” said county CAO Matt Fenske.
“Of that balance, one company in particular has recently filed for bankruptcy and owes over $430,000,” he said.
Last week the Globe and Mail reported on the confidential Alberta Mature Asset Strategy (MAS) draft.
“The MAS is focused on leveraging policy and regulatory changes to stimulate economic growth in Alberta’s mature producing regions,” states the report.
The report suggests that if natural gas in central and southern Alberta is disconnected from main export pipeline and operated at a lower pressure, it would present opportunities to reduce compression costs, serve local markets more efficiently and produce the province with flexibility “not available with trans-provincial pipelines that fall under the jurisdiction of federal regulators.”
It also claims that a way to support the marginal and inactive producing asset base, “is through higher natural gas prices that reflect full-cycle costs, including closure.”
There are 274,215 wellbores and unclaimed surface locations in the province that carry over $1 billion annually in fixed costs.
Of the 56,034 marginal wells that are primarily producing gas, 55 per cent of them are found in the counties of Newell, Cypress, Wheatland, Kneehill and Special Areas.
While companies are required to reclaim the land and plug unused wells the costs are huge and cleaning up the liabilities have created problems between the industry, government and rural municipalities.
“The trust has been broken,” states the report.
The MSA suggests that a Legacy Asset Insurance Fund be developed which would be financed by licensee contributions “but ultimately backstopped by the province” to provide dedicated capital.
With the more than 240,000 “mature” wells across Alberta the total cost for cleanup could range from $33 billion to over $100 billion, states the report.
Premier Danielle Smith told media that plans for clean-up are expected to be released in April and that public funding will not be needed for the new initiatives.
