Starland County has recently been notified by the Provincial Government of proposed changes to the way property taxes are collected on the oil and gas industry. Under current tax rates, the new system proposed by the province would result in a loss of between $2.6 million and $3.75 million dollars for Starland County. Farmland and residential taxes would need to increase nearly 200% to make up for the loss of revenue. As program and capital spending have already been cut dramatically in recent years, the only way to continue to function with a base level of services would be some combination of large tax increases on farmland, residential ratepayers, and on the remaining junior oil and gas companies still operating within the County, as well as further reducing or eliminating services.
Years of assessment reductions since 2015 have already left Starland County in a situation where sustainability of services is in doubt. These further reductions amount to nearly a quarter of the revenue that remains after years of reductions. These last years have seen an operational budget of $14 million dollars reduced to $10 million with capital equipment being virtually eliminated. Without major changes to taxes and services, these new reductions put the sustainability of Starland County in question.
Through these changes the Provincial Government is attempting to shift money out of rural Alberta and onto the balance sheets of the largest oil and gas companies operating in the province. In fact, 70% percent of the proposed benefit of these changes is going to just 27 oil and gas companies out of the nearly 800 oil and gas companies that are affected by these changes. This means that in some cases smaller operators will actually end up paying more. These large companies are under no obligation to invest the savings into rural Alberta and we do not expect them to while commodity prices remain low. The net effect is increased profits for big oil and gas combined with higher taxes and unemployment for rural Alberta.
The final decision on these changes is expected by mid to late August so we need to act now! If this proposal is approved there will be disastrous consequences for Starland County’s ratepayers. Starland County urges its residents and farmers to contact the Provincial Government representatives and let them know your thoughts on this issue. I have met with our MLA to voice our concerns and Council has a pending meeting with our local MLA to discuss this issue. Your support will be crucial in defeating this proposal.