County of Minburn Could Lose $3 million in Revenue
County of Minburn
Submitted
The Government of Alberta is proposing changes to the assessment model that is used to determine the
value of regulated properties such as oil and gas pipelines and wells. These changes would significantly
reduce the County of Minburn’s tax revenue and may impact not only the long-term viability of our
municipality but also that of the entire region.
Your County Councillors and administration are extremely concerned about the potentially
devastating impact that this decision would have as it could necessitate the County of Minburn to
examine reductions in municipal services and increases to property taxes as a means to offset some
of the revenue loss. This will impact you and it is important that you are aware of these issues.
While the provincial government’s proposed changes are intended to enhance oil and gas industry
competitiveness during these challenging times, these changes would have serious implications for
municipalities in the region, as we already face significant economic headwinds due to our rural location,
declining population, decreased provincial transfer dollars, and millions of dollars in unpaid property
taxes. This will also affect Towns and Villages across Alberta, as these residents will be required to take
on a larger share of the Provincial Education Tax.
The County of Minburn is not alone as all rural municipalities throughout Alberta are facing these same
grim prospects for their residents and small businesses. Despite the far-reaching effects of the proposed
changes, municipalities were not consulted during the process.
The model changes proposed by the Province is based on four possible scenarios. In these scenarios, the
largest oil and gas companies operating in the province will receive a disproportionate share of the
benefits from the changes to the assessment model. Many of these companies have holdings worldwide
and are under no obligation to reinvest savings in Alberta. Contrastingly, small and locally owned
companies will on average, receive significantly less benefits, and in many cases may face assessment
increases from the province.
The financial impact of these scenarios is monumental. The County of Minburn faces up to a $3 million
financial loss, which equates to 30% of our revenue from taxes or 18% of total revenue. We further
expect that the impacts of the assessment model change to worsen following the first year but were not
provided detailed enough information by the province to complete a multi-year outlook.
To better illustrate, accounting for this expected shortfall would require the County to increase residential
and farmland taxes in the vicinity of 164.9%, or the non-residential tax rate by 47.6%, or to reduce our
full-time workforce by almost 60%.
Simply raising taxes of offset the impacts of the assessment model change is not practical or sustainable
and will be in effect just shifting the tax burden from the oil and gas industry to other local businesses
and residents.
July 31, 2020
In reality, the County of Minburn will be forced to enact a combination of tax rate increases, staffing cuts,
reduced level of municipal services and funding of intermunicipal agreements in order to remain viable.
As a result, these changes will not only impact our municipality and the services that we provide but also
the surrounding towns and villages that are within our region.
Currently, the County of Minburn cost shares with our urban neighbours through various intermunicipal
services, such as fire protection, FCSS, as well as recreation and regional libraries. The County also
provides financial support to several agricultural societies and non-profit groups that provide various
benefits to our residents. Under the proposed changes, the County may no longer have the financial ability
to fully fund these organizations and their initiatives.
The County of Minburn had already planned to make reductions in programs and services to account for
previously lost revenue from unpaid taxes from energy companies prior to this announcement. Actual bad
debts written off in 2019 alone totalled over $2.4 million. In 2020, the County has made further provisions
in its budget for another $1 million in bad debts.
However, when these bad debt losses are combined with the proposed assessment model changes and the
recently introduced Provincial Policing Tax, the County may have no choice but to contemplate further
reduction of services in coming years.
The County of Minburn, like most municipalities across Alberta, is a proud supporter and partner of the oil
and gas industry. We recognize that municipalities need to be a part of the solution to make the industry
more competitive but should not be forced to absorb crippling changes resulting from a proposed
assessment model.
What are we doing?
We are contacting Premier Jason Kenney, MLA Jackie Armstrong-Homeniuk, and Municipal Affairs
Minister Kaycee Madu to express our concerns over the proposed changes as a final decision is expected
to be announced as early as mid-August.
What can you do?
These proposed changes affect you as a citizen. It is critical that you are aware of the impacts these
changes will have on the County’s ability to provide services and main its infrastructure, as well as the
financial burden that these changes may ultimately place on you.
If you can, please let your MLA know your thoughts on this issue.
