Prairie Post (East Edition)
Energy minister responds to concerns over unpaid lease and tax payments by oil and gas companies
Saskatchewan Minister of Energy and Resources Bronwyn Eyre is aware of concerns about unpaid lease and tax payments by oil and gas companies, but she is confident in the effectiveness of the current regulatory framework to address these concerns.
She spoke to the Prairie Post in response to a story published in the Nov. 5 edition of the paper.
That article refers to landowners in southwest Saskatchewan who are not receiving their surface lease payments and who have concerns over well maintenance and reclamation.
The story also provides details about three resolutions considered at the midterm convention of the Saskatchewan Association of Rural Municipalities (SARM) on Nov. 9, which asked the provincial government to take action to address the non-payment of municipal taxes by oil and gas companies.
“We do have a strong record as a regulator,” she said. “Certainly, on the tax front and on the revenue front I understand the issues, and certainly I’m open to further discussions with stakeholders, that goes without saying. I do think it’s important that people know that they should reach out to the Ministry of Government Relations, but also of course the Ministry of Energy and Resources and of course government as a whole, and that we are of course aware of this and are looking at their views and certainly taking them seriously.”
She referred to the volatility experienced by the energy sector, which will be an ongoing consideration in the provincial government’s approach to these concerns of landowners and rural municipalities.
“In terms of surface rights legislation for example, that’s something that’s come up previously and continues to in terms of landowners raising it,” she said. “Obviously it’s no surprise to anyone that the energy sector has been challenged and subject to volatility the last few years. That was the case in 2014, when prices crashed and we put the surface rights legislation on hold, and that is where it currently remains.”
The provincial government launched a review of the Surface Rights Acquisition and Compensation Act in August 2013. The intention was to consider the need for changes to this law, including compensation for surface right access. Minister Eyre felt the energy sector volatility that paused this review in 2014 is still there and the government will therefore continue to have a careful approach.
“We understand that there are some landowners and some RMs that have faced challenges when it comes to collecting taxation or collecting revenue when oil and gas companies experience financial difficulties,” she said. “That’s of course an issue and we understand it, but it has also been until now a fine balance where we have felt we have to tread carefully in this area.”
The issue of unpaid taxes by oil and gas companies has been raised before by rural municipalities. A resolution was passed at a SARM midterm convention in 2018, which asked the provincial government to change the licensee liability rating of resource companies to include consideration of payment of municipal taxes as a requirement to continue operating.
The Ministry of Energy and Resources responded to that resolution in January 2019, indicating that the government was not planning to expand the scope of its Licensee Liability Rating (LLR) program at that time to include the collection of municipal taxes or surface rentals. It also indicated that rural municipalities already have extensive powers under the Municipalities Act to pursue collection of unpaid taxes and the government encouraged local authorities to use those existing powers.
Eyre repeated this previous viewpoint about the usefulness of the Municipalities Act to help rural municipalities with their concerns. She noted the Alberta government tabled amendments to existing legislation on Oct. 28, 2021 to give municipalities in that province more power to collect unpaid property taxes from oil and gas companies, but those powers already exist under the Municipalities Act in Saskatchewan.