ATHABASCA - Proposed changes to the province’s linear assessment model and how energy companies are taxed by rural municipalities was on top of the discussion list as Athabasca County councillors and administration had an opportunity to put their questions and concerns to the two MLAs that represent the area.
Athabasca-Barrhead-Westlock MLA Glenn van Dijken was in county council chambers for council’s Aug. 11 meeting along with Fort McMurray-Conklin MLA Laila Goodridge from her home via Zoom, as her constituency covers an eastern slice of the county.
The meeting was scheduled prior to the province’s release of the four options being considered to alter the current assessment formula, but became all the more urgent when those plans were released in July. Municipalities fear they will forego millions in taxes and be unable to deliver the services residents have come to expect.
“I’m here primarily to listen, to hear the concerns of the municipality,” van Dijken told council in his opening remarks. “I believe there is a good discussion happening at this time, but no final decisions have been made. The review is the review and we need all stakeholders to be at the table, and I believe this is part of the discussion and the feedback that I need to be able to help represent you as a rural municipality.”
County manager Ryan Maier spoke first on behalf of the county, laying out how the changes will impact the municipality, if any of the four proposed options are implemented.
“None of these four scenarios are beneficial to any of the municipalities that we’re aware of,” said Maier.
Athabasca County stands to lose anywhere from $1.1-$2.35 million in tax revenues, just in year one, he said, adding 40 per cent of the tax revenues collected by the county can be attributed to linear property. He also pointed out energy companies are already $500,000 in tax arrears with the county, and the numbers for 2020 are not yet available. This is unsecured debt for the county and there have been no efforts by the province to ensure the companies pay their taxes.
Maier continued to lay out the case for the county, referring to the thousands of kilometres of county roads and hundreds of bridge structures, that, although owned by the province, are maintained by the county.
“That’s about $500 million in roads and bridge networks that we don’t own,” he said. “We are the caretakers of that, so it’s not an asset the municipality has, but it is a cost every year for us to maintain that, about $5 million per year.”
He went on to speak of the partnerships and agreements that have been formed with neighbouring municipalities in Athabasca, Boyle and beyond, noting the county is responsible for 50 per cent of the annual operating deficit for recreation in both those urban municipalities.
The county is also responsible for the operations of Family and Community Support Services (FCSS) in the region and contributes 78 per cent of the municipal funding towards those operations. The county also oversees tourism and economic development and the community transportation program, not to mention its involvement in offering fire and emergency services, library services, water and wastewater, and the list goes on.
“Those are all the things we have concerns may be in jeopardy if there are some significant changes here because we would have to take a really hard look at the overall budget,” said Maier.
He also presented a 2016 letter from Canadian Natural Resources Ltd. (CNRL) that states that company’s municipal taxes accounted for six per cent of its overall operating costs.
“To be as aggressive as they are in reducing that overall assessment and overall tax burden, we just think that it’s pretty intense for only six per cent of their overall operating costs,” said Maier. “If we can look for opportunities to save money we will, but we don’t want it to be on the backs of our other ratepayers.”
van Dijken was first to respond, saying he understood the “significant challenge that is being faced” and reiterated that no final decision has been made and he doesn’t expect one until later in the fall, and not at the end of August as some have speculated.
“I think we can all understand that we can’t tax industry to death and we have to protect the wellbeing of municipalities,” said van Dijken. “The Alberta challenge right now is trying to understand the environment that we’re now in fiscally, whether this is the new normal, or temporary, and how do we move forward? These discussions have to happen, even though they are tough discussions.”
Goodridge said she would like to see rural municipalities get together to find what they would consider to be a suitable tax model for energy infrastructure in their areas.
“I’m a big fan of compromise,” she said. “Look at it and see where things are not aligned with other pieces.”
She said she would ideally like to see a consistent tax regime across the province for similar services, though she acknowledged that was likely “a pipedream.”
The rural-urban divide is always apparent in Alberta, said van Dijken, and sometimes urban MLAs have to be reminded of the role rural Alberta plays in the province. There is a general understanding of municipal finances among MLAs, he said, but there is sometimes a disparity.
“As a rural MLA, I am constantly faced with having to challenge a lot of the urban programs that are being developed and whether or not it is a true need for this province,” said van Dijken, giving a hypothetical example of when the federal government says it will contribute millions towards public transit, as long as the province matches it.
It’s difficult to turn down such an offer, but in the meantime rural roads and infrastructure are deteriorating and finances are being allocated to urban public transit, he said.
Goodridge continued: “It’s one of the struggles that we have in rural northern Alberta. We produced a good chunk of the resources that have not only kept our province running, but our country, quite frankly, and we really do need to collectively share our feelings and frustrations with the feds.”
After an hour before council, reeve Larry Armfelt thanked the MLAs for their time and said he hopes to maintain open and professional dialogue channels with the MLAs and the provincial government as all levels of government adjust to the new economic realities being faced by everyone.
