Foothills County and other rural municipalities are being very cautious over a new provincial program that could see assessment taxes on energy producers lowered.

The effect could be lower revenue for rural municipalities at a time they can least afford it.

Foothills County Reeve Suzanne Oel says they're reviewing the numbers and any potential impacts now.

"We are looking at that and we want to figure out if our numbers are similar to numbers that we're working with RMA (Regional Municipalities Association) on. When we kind of come to a conclusion of what that might look like, we're bringing that to the council table on (Wednesday) August 26th."

The Province's proposal would see them lower assessment taxes on wells and pipelines along with machinery and equipment properties, all to help energy companies better weather these tough times and hire more workers.

Oel says they haven't crunched the numbers yet, so they're not sure what the outcome would be.

"You know when we look at it, we'll see do we need to compensate with raising residential, non-residential taxes, cuts to work force, reducing spending or using reserves."

Oel says the changes will effect other County's and Municipal Districts more reliant on oil and gas revenues than Foothills County who's tax base is more agricultural and residential.

The RMA is critical of any move to manipulate the assessment system saying, "Alberta’s assessment system should not be modified or amended to address short-term challenges of a specific industry or property type."

Their position statement on the issue goes on to say:

The regulated assessment model is highly complex and not designed to be used to provide targeted support to specific industries or property types. As such, any attempts at targeted industry support through assessment manipulation will have unintended impacts on both property owners and municipalities.

“Ability to pay” is not a factor in the assessment process for any regulated and non-regulated property in Alberta, and should not be built into the model for wells, pipelines, and other oil and gas equipment. This should be addressed through other provincial policy tools.

Manipulating the assessment system to support industry competitiveness will have a wide range of impacts on municipal assessment values, which affect municipal revenues, grant distribution, requisition calculations, and will have both local and regional impacts across Alberta.

A reduction in assessment will force municipalities to make a range of revenue-generation and spending changes, including some combination of raising tax rates on residential and non-residential property classes, reducing service levels, revising or cancelling intermunicipal agreements, or potentially facing non-viability. The actual impacts of the proposed changes will vary widely by municipality.

There is no mechanism to require the oil and gas industry re-investany cost savings received through changes to the assessment model in Alberta in the form of job creation and/or capital investment.

 

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