Municipalities get relief on uncollectable tax
The Alberta government is supporting municipalities by providing a tax credit for uncollectable education property taxes on oil and gas properties.
Municipalities collect education property taxes on behalf of the province through their municipal property tax system. Oil and gas facilities are taxed until there is an abandoned status on the records of the Alberta Energy Regulator. Once abandoned, no assessment is prepared. This process can take several years and, in the meantime, the municipality is required to remit education property tax.
“I heard loud and clear during my visits to rural communities this summer that they are facing tax recovery challenges. So we made this a priority and worked with the Alberta Association of Municipal Districts and Counties to come up with this solution. I am proud that we are able to make a difference and support municipalities.”
The Provincial Education Requisition Credit, or PERC, will be retroactive to 2015, when oil prices began to fall. It will operate for five years, until 2019.
Municipalities that have written off the municipal property tax for oil and gas facilities will be eligible to apply for a credit on the education component of their property tax.
“The AAMDC is very appreciative of Minister Anderson and his cabinet colleagues, listening to municipalities about this challenge. Having to pay education tax to the government that couldn’t be collected has created significant financial challenges for our members. With the government’s support, municipalities can now focus on other matters, as we look forward to the long term solution to this issue.”
Program guidelines and application forms are available at municipalaffairs.alberta.ca. The first deadline for applications is January 15, 2018.
- The credit will be funded through the Alberta School Foundation Fund’s net asset fund.
- PERC applies only to oil and gas properties that have had their municipal tax written off. It does not apply to other types of uncollectable municipal property tax, or to seniors’ housing requisitions. These issues are being reviewed by the province and stakeholders.
- A cost estimate of the program will be determined once applications have been received from municipalities for the first intake, which covers the first three years of the program (2015-17). There is a cap of $10 million per year.