Restoring tax accountability

Overview

Bill 77, the Municipal Government Amendment Act, updates the Municipal Government Act to strengthen the budgets of municipalities so they can continue delivering programs and services without increasing taxes.

The amendments restore a special lien giving municipalities priority to collect unpaid property taxes from oil and gas companies. The Provincial Education Requisition Credit (PERC) program, which allows municipalities to defer payment to the province of uncollectible education property taxes, will also be extended an additional 2 years to the 2023 tax year.

In 2019, the Alberta Court of Appeals ruled that current liens do not legally apply to linear property such as wells and pipelines. As a result of the court decision, there is no effective legal mechanism for municipalities to collect unpaid taxes on oil and gas properties such as wells. A survey conducted in 2021 by the Rural Municipalities of Alberta found $245 million in unpaid property taxes was owed to its members - a 42% increase from 2020.

This bill is part of our commitment to support municipalities by ensuring a balance between tax accountability and municipal sustainability.

Key changes

Bill 77, the Municipal Government Amendment Act:

• provides a legal framework for municipalities to continue to fund the programs and services their residents need
• restores a special lien that gives municipalities priority over other creditors from oil and gas companies whether operating or bankrupt
• the special lien:
  • assigns liability to both the owner and operator for unpaid property taxes
  • introduces a 120 day period between the passing of the bill and the payment date to negotiate payment arrangements
  • applies to all the debtor’s assessable property within the municipality
  • applies to unpaid taxes owing at the passing of the legislation and thereafter
• balances the need for corporations to pay their fair share while maintaining sustainable municipalities

To support municipalities, government will:

• extend the PERC program, set to expire in 2021, to the 2023 tax year
• allow municipalities to apply for the PERC program without writing off uncollected property taxes

Learn more: Restoring Tax Accountability Fact Sheet (PDF, 127 KB)

Next steps

Amendments took effect upon proclamation.

News

• Restoring tax accountability (October 28, 2021)