Municipal leaders push province on taxes, referendum concerns

Alberta's municipal leaders are calling on the province to step in to protect their revenues, including collecting hundreds of millions of dollars in unpaid property taxes by oil and gas companies.

According to the latest survey from the Rural Municipalities Association, local councils continue to struggle as $245 million in property taxes owed by oil and gas companies have gone unpaid.

Municipal Affairs Minister Ric Mciver said at a virtual Alberta Urban Municipalities Association (AUMA) convention Friday that it's a “huge issue” that cannot be ignored, and he is working to bring oil and gas companies and municipalities together.

“I'm encouraging energy companies to appreciate municipalities and I'm encouraging municipalities to appreciate energy companies. You want those companies there for the next 50 or 100 years to pay taxes to you,” said Mciver.

AUMA president Barry Morishita told reporters following the convention that the province has the authority to tackle the problem with legislation.

“The fact is that no one else in the entire province, when it comes to property taxes, can get away with not paying. And when 60 per cent of those companies are solvent and still not paying — there has to be a better solution than `get along.'”

During its convention, AUMA members agreed to multiple recommendations aimed at addressing funding challenges, including to lobby the province for the legal ability to enact a special tax bylaw to pay for policing costs. Morishita said many municipalities were already separating their budget lines in the interests of transparency.

“The reason their taxes went up is because they were paying for policing when they hadn't before,” he said.

Members also voiced concerns over funding for local housing initiatives, including Edmonton Mayor Don Iveson, who twice tried in vain to get ministers to commit to operating funding for a rapid housing initiative.

Premier Jason Kenney also spoke to attendees virtually, addressing concerns about changes to the Municipal Sustainability Initiative (MSI) first announced with the February budget.

“I know some of you are frustrated by the out years' reduction in MSI. We've tried to give you a predictable path forward,” said Kenney.

“I hope you will also recognize that we, together with the federal government, have provided extraordinary short-term capital support and capital grants,” he said adding that the province is facing a massive fiscal challenge and needs to show spending restraint.

Morishita acknowledged the financial squeeze and said he appreciates the need for restraint, but wants to see better collaboration to come up with a long-term plan that works for everyone.

“Cutting MSI to municipalities 25 per cent over the next few years doesn't speak to investment, doesn't speak to jobs, so we need to continue to have that dialogue,” Morishita said.

“We don't think the ad hoc measures of just cutting us to restrain spending for a few years is a good planning tool. We want long-term solutions,” he said.

He acknowledged that the relationship between municipalities and the provincial government needs to be improved.

“We've been pretty frustrated on some issues, some fundamental issues ... the government is shortchanging Albertans if they're not more interested in working together with us,” said Morishita, adding that Mciver has made a commitment to do that.

With municipal and school board elections set for October alongside a provincial referendum, including on federal equalization payments, attendees pressed government ministers for more details.

Mciver said details would be provided well in advance of the elections.

He said he is hopeful municipalities won't need extra support for getting ballot boxes ready under COVID -19 health measures, but he would provide them with details on a special $10-million grant to help with additional election costs related to referendum questions.

“We won't leave it to the last minute ... we'll make decisions in time to make adjustments if we need to,” said Mciver.

Finance Minister Travis Toews said it is important Albertans weigh in on whatever referendum questions end up on the ballot.

“We have some very fundamental questions that would have significant and far-reaching effects on Albertans,” he said.

Morishita said the AUMA has been consistently opposed to pairing a provincial referendum with local elections, and planning challenges could be compounded by COVID -19.

“To crowd a really important election for municipalities with referendum questions just doesn't make sense to us,” he said.