BIGHORN – The MD of Bighorn has recently granted a tax collection extension to not miss out on more than $1 million in revenue that could otherwise go unpaid.
During the Tuesday (Aug. 11) morning council meeting, director of finance Shaina Tutt presented a report to MD council proposing a 10-month payment agreement with Canlin Energy Corporation of $111,587 instalments to the MD starting this August.
“This would allow the MD to collect $1,115,874.90 in taxes that could otherwise remain unpaid. Administration is proposing that if an agreement is entered into that penalties are not applied during the term of the agreement,” Tutt said during the virtual meeting.
Typically annual property taxes are due at the end of June, but due to the COVID-19 pandemic, the MD has extended the tax payment deadline to the end of August.
But the request to defer payment over 10 instalments is the second year in a row the gas company has requested an alternative payment option – last year paying 50 per cent of owing taxes in June and the remaining balance divided equally from July to December 2019.
“Canlin Energy Corporation along with its natural gas company peers continues to face severe cost challenges in economically sustaining its long-life natural gas assets in the region," Canlin vice-president Debbie McBride wrote in a letter to council dated July 30, 2020.
"The economics of sustaining Canlin’s assets continues to be threatened by consistent long-term low commodity prices, restricted access to bank lending and high fixed costs compromised of cost-intensive municipal taxes, surfaces lease rentals and government levies.
“Added to those cost challenges is the economic fallout due to the COVID-19 pandemic.”
Canlin Energy Corporations is one of the oil and gas companies within the MD that pays linear taxes. The linear tax amount is determined through the provincial assessor, who takes taxes from linear properties including pipelines, railways, telecommunication and electrical power systems. The taxes are then paid to the municipality the industrial property is located within, which helps contribute to the overall revenue in annual municipal budgets. Bighorn typically has an annual operating budget of $6 million.
“Canlin is coming to you at this critical point in our fight for sustainability with a request for a payment plan for Canlin’s 2020 property taxes,” McBride wrote.
Council questioned administration if they had the power to defer industrial and linear taxes, which Tutt assured the MD council did.
“I’m just glad to see an oil and gas company pay their taxes,” Coun. Paul Clark said.
Reeve Dene Cooper noted Bighorn was fortunate, as other municipalities have faced unpaid linear property taxes for years.
“It is a problem many other jurisdictions see not just this year, but several repeated years [with] municipalities left with responsibilities unsatisfied,” Cooper said.
The request comes as the Alberta government is currently considering a proposal to cancel linear taxes across the province. The proposal was released two weeks ago to the Rural Municipalities of Alberta (RMA) association. The president called it “one of the most profound documents [the association] has been given” and warned the loss would be on the backs of municipalities and its residents.
The reeve said the if the proposal went through, the change would affect the MD annual operating budget by eight per cent, but noted Bighorn was lucky as a municipality as all industrial properties have paid their taxes up to this year.
“[Canlin] is being proactive,” Tutt noted during the Tuesday meeting.
Council acknowledged the gas company was taking the right steps to assure its property taxes were paid and unanimously approved the deferred payment plan.
