Proposed Changes to Provincial Linear Assessment Model

On July 23, 2020, the County of Grande Prairie was notified by the Rural Municipalities of Alberta (RMA) about the Province’s plans to introduce changes in how oil and gas facilities, and well, pipeline, machinery and equipment properties will be assessed, that would result in a reduction on the amount of revenue municipalities can collect from assessments.

The proposed changes could mean:

  • 54% increase in residential tax rates; 
  • 15% increase in non-residential tax rates; a
  • 23% reduction in the County’s workforce; or a combination.

The preferred option by the oil and gas sector would likely result in a 10% loss of revenue for the County, with revenue potentially decreasing every year.

Reeve Leanne Beaupre says “While we are strong advocates for the oil and gas sector and are proud of the many companies that call the County of Grande Prairie home, we are concerned that these options will put a deep financial burden on County residents and businesses.”

According to the RMA analysis and reports, smaller, locally owned companies will benefit least from the changes, and many will actually face significant assessment increases, putting them at a competitive disadvantage with larger companies who will have no obligation to reinvest those savings into Alberta. The RMA has put forward several alternative options to explore by the Province that would be better suited to addressing industry competitiveness.

“We are optimistic that the Province will hear our concerns and work to find solutions for industry that share in the cost and rewards of public investment, are sustainable, transparent, and most importantly, guarantee results in terms of jobs and investment,” said Beaupre.

The County is currently reaching out to MLAs representing the region and applicable ministers to discuss the proposed changes and the impacts to the County.

If residents and businesses have questions or concerns about the proposed changes, they are advised to contact their local MLA.

MLA Tracy Allard – Grande Prairie Constituency
Phone: 780-538-1800
Email:  grandeprairie@assembly.ab.ca
Mailing address:
            #207, 10605 West Side Drive
            Grande Prairie, AB
            T8V 8E6

Honourable Travis Toews – Minister of Finance, and MLA for Grande Prairie-Wapiti Constituency
Phone: 825-412-2050
Email:  grandeprairie.wapiti@assembly.ab.ca
Mailing address:
            15602C – 102 St
            Grande Prairie, AB
            T8X 0K7

What changes is the Provincial Government proposing?

The Government of Alberta is seeking to change the system for assessing designated industrial properties and facilities in the oil and gas sector, including wells, pipelines, machinery and equipment. These changes have the potential to reduce the amount of revenue for the County by up to seven per cent.

For more information, review the Rural Municipalities of Alberta Assessment Model Review – Outcomes Summary [PDF - 727 KB].

What does this mean for me?

To recover the costs, the County would have to increase residential taxes, business taxes, or both. Another option would be to reduce our workforce, which would prevent an increase in taxation, but would mean that County residents are paying the same amount for fewer services.

Potential Municipal Impacts Scenario A Scenario B Scenario C Scenario D
Residential Mill Rate Increase 17.4% 22.2% 42.4% 54.3%
OR:        
Non-Residential Mill Rate Increase 4.3% 5.5% 11.1% 14.7%
OR:        
Workforce Reductions

7.3%

9.3%

17.8%

22.8%

 

 More information is available in the Assessment Model Review Impacts Report – Grande Prairie.

If we support the oil and gas sector, why would we oppose this?

The oil and gas sector is a very important industry in our region and the County of Grande Prairie is supportive of initiatives that benefit the industry provided it doesn’t come at a cost to our residents and our region.

The information we have from the Rural Municipalities of Alberta is that there is no data indicating the industry will benefit from this change to the assessment system. There is also evidence suggesting smaller, locally owned businesses will end up paying more, putting them at a competitive disadvantage with larger companies.

Most of those larger companies have holdings worldwide and there is no obligation for them to reinvest those savings in Alberta. This means that County residents and businesses will pay more to have less with no guarantee of an increase in jobs or other investments in our local economy.

What is the County doing?

The County is contacting the MLAs representing the region and applicable ministers to discuss the proposed changes and the impacts to the County and region.

What are the long-range implications of this change?

At this time, we only know what the impacts could be for the 2021 budget year. There is no data available to suggest what the long-term impacts will be for the County. This is a significant challenge for the County’s budget process and creates uncertainty about the long-term economic viability of our region.