The Government of Alberta is proposing changes to the assessment model for regulated properties such as oil wells and pipelines, which will significantly reduce Flagstaff County’s tax revenue.

Flagstaff County Council and administration are extremely concerned about the potentially devastating impact this decision could have on the long-term viability of the entire Flagstaff Region. With the impact of this loss in revenue, Flagstaff County will be required to look at a reduction of services and increases in property taxes. This will impact you and we need your help to advocate our concerns.

While the provincial government’s proposed changes are intended to enhance oil and gas industry competitiveness during this difficult time, these changes would have serious implications for municipalities and small local businesses throughout the Flagstaff Region, where we already face significant economic challenges due to our remote rural location and declining population.

Flagstaff County is not alone. Municipalities throughout rural Alberta are facing the same grim prospects for their residents.

Based on the four possible scenarios provided by the RMA (Rural Municipalities of Alberta) and financial data from the MFIS (Municipal Financial Information System) database, estimates indicate that Flagstaff County faces a decrease in revenue by as much as 18 per cent (about $5 million).

To compensate for that significant loss, if there were no changes in services, Flagstaff County would be required to increase the residential/farmland mill rate by as much as 191.1 per cent, or increase the non-residential mill rate by as much as 43.3 per cent, or cut our full-time workforce by nearly three-quarters.

Raising tax rates to offset the impacts of the assessment model change will have the effect of simply transferring taxes from the oil and gas industry to other businesses and residents.

In reality, Flagstaff County may be forced to enact a combination of both tax rate increases and staffing cuts, as well as reduce service levels and intermunicipal agreements to remain viable.

These changes will impact not only our municipality and the services we provide to residents and businesses, but also all of the municipalities that comprise the entire Flagstaff Region.

Flagstaff County currently cost-shares with our urban neighbours through intermunicipal agreements for fire protection, peace officer services, Flagstaff Regional Solid Waste Management, regional recreation funding, Flagstaff Family and Community Services, and Parkland Regional Library.

Other organizations currently benefitting from optional County funding include: Flagstaff Community Adult Learning, Parents for Fun in Flagstaff, Flagstaff Satellite Dayhome Society, STARS Air Ambulance, Battle River Research Group, the ACCA Youth Leadership Camp, the Flagstaff County Library Committee, and Battle River Watershed.

Under the proposed changes, County support to any of these organizations or initiatives may have to be cut or eliminated.

Flagstaff County has already made significant reductions in programs and services to account for the loss of revenue from unpaid taxes from resource-based companies. Actual bad debt in 2019 totalled nearly $3 million. This year, we have budgeted for $4.5 million in bad debt.

Additional changes to the Police Funding Model, on top of historical unpaid taxes from oil and gas, may influence further reductions in services or property tax increases in the coming years.

Although the implications of the province’s proposed changes are far-reaching, municipalities were not consulted during the process.

Flagstaff County, like many other municipalities across Alberta, is a proud supporter and partner of the oil and gas industry. We all deserve to be part of the solution to industry competitiveness, rather than be forced to suddenly absorb crippling changes to the assessment model.

The RMA (Rural Municipalities of Alberta) expects the impacts of this decision to worsen following the first year of implementation but notes it was not provided access to the detailed assessment information necessary to conduct a multi-year impact assessment.

Based on the Government of Alberta’s proposed scenarios, the largest oil and gas companies operating in the province will receive a disproportionate share of benefits from changes to the assessment model.

Small and locally-owned companies will, on average, receive significantly less benefit, and in many cases will face significant assessment increases.

Many of the companies that will benefit most from the assessment model review have holdings worldwide and are under no obligation to reinvest savings in Alberta.

What are we doing?

We are contacting Premier Jason Kenney, MLA Jackie Lovely, and Municipal Affairs Minister Kaycee Madu to express our concerns over these changes. A 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 our ability to provide services and maintain infrastructure, as well as the financial burden such changes may place on you.

• Please let your MLA and Premier know your thoughts on this issue. MLA Jackie Lovely can be reached by phone at 780-672-0000 or via email at camrose@assembly.ab.ca. Premier Jason Kenney can be emailed at Premier@gov.ab.ca

• Please call your Flagstaff County councillor if you have any questions about this or want additional information.

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Reeve Don Kroetch
Flagstaff County