Unpaid oil and gas property taxes

Overview

Property taxes on oil and gas wells, pipelines and other industrial assets provide an important source of revenue for many municipalities, especially in rural Alberta. Most energy companies pay their property taxes in full and on time. However, unpaid property taxes from a subset of companies have been an impactful issue for rural municipalities. Although Alberta’s economy has recently improved, many rural municipalities are still owed property taxes from companies that are delinquent, insolvent, or no longer operating. This leaves municipalities facing difficult decisions about how to manage the related revenue shortfalls.

Alberta’s government has taken several actions to address the issue of unpaid oil and gas property taxes over the years, including:

• Passing legislation to restore a special priority lien that gives municipalities priority over other creditors and expands tax recovery options, when taxes are owed on oil and gas property.
• Providing grant funding to the Rural Municipalities of Alberta (RMA) to help develop guidance materials for municipalities on using the special priority lien and other recovery mechanisms.
• Updating industrial assessment policies to prevent an increase in unpaid taxes on the non-producing wells and pipelines of defunct companies.
• Strengthening the Alberta Energy Regulator’s (AER’s) liability management framework and introducing property tax payment compliance as a factor in assessing a company’s overall risk.
• Issuing a directive to the AER that prevents approval of well licence applications or transfer applications when a company owes property taxes above a minimum amount.
• Continuing to cover unpaid education property taxes from oil and gas tax arrears through the Provincial Education Requisition Credit program.

Alberta continues to have the most competitive tax system in the country that supports investment and jobs in the oil and gas industry. Alberta’s government also recognizes the need for additional measures to reduce future tax delinquency and ensure municipalities are better protected.

Property Tax Accountability Strategy (PTAS)

Working Group

The PTAS working group was formed in March 2025 as a collaboration between the Government of Alberta and RMA to develop actionable solutions to the ongoing issue of unpaid oil and gas property taxes in rural Alberta.

The working group included representatives from:

• Alberta Municipal Affairs
• Energy and Minerals
• AER
• RMA
• individual municipalities
• municipal administrative associations
• industry observers

Its work focused on:

• identifying key recommendations to improve municipal tax recovery
• building a shared understanding of industry tax arrears data between the province and stakeholders
• reducing impacts on municipalities
• exploring legislative options to address gaps in current policy and regulatory frameworks
• helping prevent future tax delinquency

Key Recommendations

In early 2026, the working group finalized 17 recommendations for government’s consideration based on 5 main themes. These recommendations were informed by the input, analysis and discussions of the working group, but do not necessarily represent the individual positions of each working group member.

Final Report

Details of the working groups findings and recommendations are published in the Property Tax Accountability Strategy Working Group Final Report.

Next Steps

While the Government of Alberta participated in the PTAS Working Group, recommendations in the final report are still under provincial review. Further consideration is needed to determine the feasibility and potential impacts of each option. The province will evaluate the recommendations independently as part of its ongoing work to support rural municipal financial stability and industry accountability.

Tax Arrears Monitoring and Reporting

In 2023, the Alberta Energy Regulator was issued a directive under Ministerial Order 043/2023, later replaced by Ministerial Order 096/2024, preventing approval of an application for a well licence or well licence transfer if a licensee, transferor, or transferee had property tax arrears above a minimum provincewide threshold.

To support the AER in administering this directive, Municipal Affairs began collecting quarterly oil and gas property tax arrears data from rural municipalities on a voluntary basis starting in May 2023.

Improvements to provincial tax arrears data collection and municipal reporting were recommended by the PTAS working group. As a result, quarterly collection of data under the Tax Arrears Monitoring Process is temporarily paused while government considers process improvements. Municipalities will be informed of any changes once data collection resumes.

Tools and Resources

• The MGA Special Lien: What it is and how to use it (RMA and Brownlee LLP, May 2023)

Contact

Connect with the Assessment and Property Tax Policy Branch:

Hours: 8:15 am to 4:30 pm (open Monday to Friday, closed statutory holidays)
Phone: 780-422-1377
Toll free: 310-0000 before the phone number (in Alberta)
Email: [email protected]
           [email protected] (tax arrears process reporting)

Related

• Oil and gas liabilities management
• AER Liability Management
• Orphan Well Association