The Minister of Municipal Affairs, Tracy Allard, announced on Oct. 19 additional measures being implemented between municipalities, the energy industry, and the provincial government to boost Alberta’s economy.
“I don’t believe that the energy industry is a thing of the past. I do believe that we need to be nimble and we need to be responsive, but I also believe there is a bright future with respect to our energy,” Allard said.
Adding, “I believe that we do have a bright future, and we need to position ourselves to maximize that bright future for the benefit of all Albertans.”
Supports to energy companies will include an exemption from property taxes for three years when drilling new wells and building new pipelines. Well Drilling Equipment Tax provincewide for new drills will also be eliminated.
Additionally, the government will lower assessments for less productive oil and gas wells while continuing the recently introduced 35 per cent assessment reduction on shallow gas wells for three years.
The measures are intended to provide certainty to industry, investors, municipalities, and other taxpayers now and into the future.
“We are doing these initiatives because you matter, your businesses matter, your family’s matter, your livelihoods matter, and your communities’ matter,” Allard said.
In the coming months, a plan for long-term reviews of the regulated assessment system and remains committed to continued consultations and open dialogue will be developed.
“When the Assessment Model Review started, we had four scenarios proposed, these scenarios would have cost municipalities anywhere from a seven per cent to a 20 per cent reduction of their tax revenue,” Allard said.
“When I was sworn in as minister of municipal affairs, my first decision was to hit pause on this review to do more consultations. I felt we needed a better understanding of our municipalities’ concerns and the overall impact of any change,” she added. “I believe that you can’t tinker with the pieces without taking a step back and looking at the whole of what you’ve done.”
Through consultations, Allard heard from municipalities that raising taxes and cutting services was a possibility, while oil and gas producers expressed that if tax concerns were not addressed, they would no longer remain viable.
“It was tapping into the collective wisdom of the leadership across Alberta’s municipalities, and industry that helped us land here today. We tailored this solution based on what we heard,” Allard said.
“This was a very complex and nuanced decision as every factor caused a domino effect,” she said.
Education, taxes, inter-municipal collaborative frameworks, police funding, senior’s recreation funding and the impacts the assessment changes would have on commercial and residential taxpayers had to also be considered.
“As the new minister, I indeed landed in the middle of this complicated and urgent issue. This decision kept me awake at night as I knew the importance of getting it right for all Albertans,” Allard said.
“I feel with our decision, we have balanced the needs of both municipalities and the oil and gas industry,” she said.
Allard anticipates that the additional measures to increase Alberta’s economy will draw in investors to the energy industry, to create and sustain jobs.
“We want businesses across the world to think Alberta when they are looking to invest. This is key to attract new investment, create more jobs, grow the economy, and ultimately expand the assessment base for our municipal partners,” Allard said.
“The most compassionate thing we can do right now for Albertan’s is to create jobs and investment for our communities,” she said.
“We worked on a solution to get us through these tough economic times. We sought to find long-term viability and sustainability with our municipalities and within our energy sector,” she added. “We all need to work together to create the most competitive environment to do business in this country, that means, the province, municipalities, and industry altogether.”
The announcement highlights the benefits of collaboration, and Allard expects to see the results in communities across Alberta.
“It shows that when we find common ground to work together, we can and will create better outcomes,” Allard said.
“Municipalities have told us they are willing to be partners in supporting our economy, including the oil and gas sector, and I would like to thank them for that commitment. I expect them to do all that they can to avoid increases to ratepayers, and I believe that they will do just that,” she said.