ALBERTANS ARE BEING SCREWED

By the conventional oil industry evasion, decades of provincial government neglect, and lax regulatory enforcement.

The duty of our provincial government, regardless of the party in power, is to be the trustee for us, the citizens, and to serve our best interests as owners of the natural resources in Alberta.

It is the responsibility of the Alberta Energy Regulator to rigorously enforce the law and regulations in our oil, gas and pipeline industry.

It is the responsibility of energy industry corporations to obey the laws, regulations that apply to their operations, be it wellsite cleanup, and reclamation, plus pay all royalties, taxes and levies owed by them, in full and on a timely basis.

SYSTEMIC FAILURE IS EVERYWHERE

The reality is there is chronic and systemic failure and neglect, by all those with these responsibilities and obligations to meet this duty of care, especially where the conventional oil energy corporations are concerned.

There are egregious and continuing failures of too many of Alberta’s operating energy corporations to meet their legal obligations.  Their major breaches of legal obligations revolve around the lack of appropriate and timely responses by the corporate management of too many of our oil lessees and operators.

There is a chronic indifference to taking action to clean up dirty wells and reclaim abandoned end-of-life wells.  The Smith UCP government policy is to transfer $20 billion dollars of the costs of cleanup and reclamation from the polluters and onto the backs of Albertans.  This is a continuation of Smith’s crony-capitalism, particularly in this industry sector.

A lot of the blame for this growing disaster is on us as Citizens. that is because we keep accepting short term gain of more drilling, production, and construction jobs as we pass along the long-term pain of wellsite clean up and reclamation on to future generations. As Pogo said decades ago “We have seen the enemy and it is us!”

This situation won’t change until We the Citizens make it change. And the time for change is now…this election. We will not get better government unless we become better citizens, who know how to be better voters.

LOCAL GOVERNMENT IS REALLY SCREWED

The same negligent corporate attitude  prevails in the avoidance of municipal taxes and levy obligations.  This municipal tax evasion has been aided by the UCP government.  Former Premier and UCP Leader, Jason Kenney, proclaimed an “amnesty” for oil corporations to pay local taxes and levies.  

He also set up a totally useless and artificial “solution” for local governments to collect back taxes.  He established the right of local governments to file a lien against the deadbeat oil operations in their jurisdictions, then he suggested they sue the corporations for the debts. A totally impractical, time-consuming and expensive “solution” when it is the responsibility of the province to deal with these industry issues and legal obligations. 

DID SMITH GET “WOKE” WITH AN ELECTION LOOMING?

So now an election is looming and these rural municipalities and counties are the UCP rural support base. Smith has finally woken up on the oil company's outstanding debt file. Here is a list of some of the actions she is tracking and the extent of the growing fiscal disaster.

I have added some commentary on things We the Citizens can do to insist our government, our regulator, and our industry does a better job of serving the public interest, not their political ends or just the private interests of the energy sector, as is the situation now.

STRONG LETTER…NOT MUCH TO FOLLOW.

1 Two cabinet members have recently written a form letter “to more than 100 energy companies behind on their property tax bill to municipal governments.” Media reports say the letter gave these companies 10 days to pay up.

What we should be told is which 100 companies, the extent of the arrears, for how long, and which municipalities are involved. Are there only 100 companies in arrears? If not, why did only these companies receive a letter and not others? Why isn’t the content of the letter released to the public? After all,  Smith is quick to release her numerous letters to the Prime Minister.

SMITH SAYS SHE FEELS OUR PAIN, BUT JUST TALKING IS EXPENSIVE

2 Sovereignty Smith is on the record at the recent convention of Rural Municipalities of Alberta stating “It’s just not acceptable and there need to be real consequences” for those failing, refusing or neglecting to meet obligations to local government.  She went further to say “We (meaning the UCP government) hope that this is just enough of a stick to pay their taxes, and make sure that municipalities are made whole.”

What makes the Premier believe a “form letter” will stir these deadbeat corporations to fulfil their obligations? New reports say there have been several attempts in recent years to “address the issue with various tweaks.”  So this form letter is the “new strategy?” 

THE “FIX” IS IN, BECAUSE WHAT IS PROPOSED WILL NOT SOLVE THE PROBLEM

3 The reported outstanding corporate tax amounts owed to local governments in 2018 was $81 million spread through 69 municipalities. At the end of 2022, the accumulated total had ballooned to $268 million.  This is when oil production is at an all-time high, and corporate profits are also at an all time high because of recovered commodity prices.

Well, we are advised that the Minister of Energy has “directed the Alberta Energy Regulator “to obtain proof from the companies that they’ve settled their property taxes before it approves new well licenses or transfer of existing ones.” That is more of a wet noodle threat than a big stick.  

But wait there's more ineffectual UCP “action.”  We are told the Regulator and Alberta Municipal Affairs (the provincial, not local governments) “will develop a list of companies that have unpaid taxes topping the allowable amount.” 

What is the “allowable amount of corporate tax evasion in Alberta? Why is there any allowable amount? I don’t have an allowable amount of back proprietary taxes.  Why is there any justification for profitable busy corporations to have allowable amounts of tax arrears? What is the threshold limit of allowable tax arrears, who sets it, based on what factors? Why is the list of deadbeats being developed this late when the issues were known in 2018?

WE ARE NOT GETTING CLARITY FROM CHAOS - JUST MORE CHAOS

4 But wait there's still more, and it’s confusing. Apparently Ministers of Energy and Municipal Affairs have “also sent letters to 139 companies that are in arrears in their municipal taxes.”  Are these in addition to the 100 form letters and to different companies, and what does this letter say? Again the media quotes the Minister of Energy saying “We’re just encouraging them to either settle those debts or make arrangements to settle those debts.”

Encouraging them?  Why not demand they pay them immediately, not by the end of April as is being proposed? Why not require these outstanding debts be paid in full before they can pay dividends, management salaries and bonuses, or do any share buybacks until all arrears are paid in full? The Rural Municipalities Association reports that seven of their rural members have unpaid taxes over $10 million.  Since 2015 Alberta rural municipalities have written off $132 million of unpaid taxes.

Right now the UCP  proposal is no new well permits or transfer will be allowed while taxes are owing.  Good, but not enough to create a sense of urgency and priority on these local government debts? 

Why not impose large and accelerating fines for any delays in payments?  Why not put credit card levels of interest obligation on the outstanding tax debts back to the dates of default until payment is made in full, starting after the 10 day period to pay up in the form letters?

AND NONE OF THIS DEALS WITH UNPAID AMOUNTS OWED TO LANDOWNER LEASE PAYMENTS, OR RECLAMATION OBLIGATIONS, WHICH IS ANOTHER EXAMPLE OF LAX ENFORCEMENT AND SMITH’S CRONY  CAPITALISM IN THE CONVENTIONAL OIL INDUSTRY.