EDMONTON, ALTA. – the government of Alberta is taking steps to reduce 2019 taxes on shallow gas wells and pipelines, with more than $23 million in tax relief estimated by the government.
The move is part of the government’s overall action plan, a government release stated, and 65,000 wells predominantly found in 15 municipalities qualify for the tax break.
“Alberta’s natural gas industry has been hurting for years due to extreme low prices, inaction by previous administrations and an outdated property tax model. Our government committed to protecting Alberta’s natural gas industry and this measure is a tangible solution that will provide much-needed, short-term relief to our producers. We will continue to bring all stakeholders to the table to find collaborative solutions on this critical issue,” provincial associate minister of natural gas Dale Nally said.
“We recognize that municipal and education property taxes are not the core cause of the industry’s struggle but are likely the only area in which short-term relief can be found, so we’re pleased with the Government of Alberta’s announcement, as it helps the shallow gas industry without unfairly penalizing rural municipalities. That said, in the long term, property tax should not be seen as a tool for relief,” Rural Municipalities of Alberta president Al Kemmere said.
Property taxes go to municipalities but the assessment model for pipelines is determined by the province and has not been updated since 2005. Municipalities will continue to collect the remainder of property taxes from shallow gas companies to be used in their local budgets.
“You can’t tax business into bankruptcy. Unlike the previous government, which sat on its hands, our government is taking swift action to support shallow gas producers, protect municipalities and ensure a fair assessment model is in place for wells and pipelines. This initiative will prevent further company failures and job losses in our province, as we saw recently with Trident Exploration, while creating a more viable system for industry and government,” provincial minister for municipal affairs Kaycee Madu said.
The ministry of municipal affairs will soon provide a list of affected wells to companies and municipalities, the release stated.