Linear Assessment

The County is pleased the Province supports a model of regional collaboration. Read the media release [PDF - 203 KB].

The Facts About Linear Assessment

What is linear assessment?

Linear tax revenues are revenues collected by municipalities from companies that have linear property items like oil and gas wells and pipelines, and power generation, power lines and utility lines within their municipality. Linear revenues collected are used by municipalities for the maintenance of infrastructure such as roads and bridges. A significant portion of the linear taxes collected are education taxes that are forwarded to the province

As most linear property items are located in rural Alberta, rural municipalities receive the majority of this revenue. Rural municipalities, including the County of Grande Prairie, are challenged with the significant and escalating costs of maintaining, repairing and building/rebuilding their infrastructure, which is strained or damaged by industry. In addition, rural residents can be adversely impacted by the effects of industrial activity.

Compared to urban municipalities, rural municipalities spend significantly more per person to maintain the basic infrastructure to support the Alberta economy.

The current model supports quality of life for all Albertans

Ensuring that rural Alberta can maintain quality infrastructure is critical for rural and urban communities. This infrastructure is integral to Alberta’s economy. Alberta’s resource industry and our agricultural industry, and those who make their living from these industries, rely on roads and bridges to get to work and to get their product to market.

Ensuring that rural municipalities have the
financial resources to support this infrastructure
is critical to the quality of life of all Albertans – urban and rural. 

Sharing linear revenue based solely on population is short-sighted

Some will argue that receiving this revenue gives rural Alberta an unfair advantage and that revenue should be pooled and distributed on a per capita basis. This argument, however, is flawed and short-sighted.

It does not take into consideration that urban municipalities collect other fees such as franchise fees from utility providers, and may receive a greater provincial transportation grant despite having fewer kilometres of roads (For example, the City of Grande Prairie receives $4.2 million for 500 km of roads in transportation grants compared to the County’s $1.2 million for 3,700 km of roads.)  As well, it only considers the revenues rural municipalities bring in and fails to consider the costs of maintaining and building this infrastructure.

In rural Alberta, this cost is significant: rural municipalities are responsible for managing about 75% of Alberta’s roads and 60% of Alberta’s bridges. The majority of the remaining roads and bridges belong to the Province.

Expenses, not just revenue, must be considered
It makes sense that expenses, not just revenue,
must be considered in discussions around municipal finances.

The County makes substantial contributions to our neighbours.

Since 1996, through a Revenue Sharing Agreement (RSA), the County has annually paid the City to reflect the use of City facilities by County residents. In 2016, the total contribution was $1.07 million. (This agreement is not reciprocal.)

In addition to the RSA, the County contributes annually to City of Grande Prairie facilities. In 2016, that amount was nearly $415,000.

The County’s 2016 overall budget includes $5.07 million in community grants. This includes the grants to the City facilities, as well as $4.66 million to facilities in local small urban communities, and local rural and urban projects and organizations.

How would the Grande Prairie Area be impacted by a redistribution of tax revenue?

The County of Grande Prairie has extensive infrastructure to maintain. A few examples . . .

  • Highest number of bridges in Alberta. The County has 317 bridges, more than any municipality in the province. A recent assessment determined $30 million is required for repairs and/or rebuilds of bridges over the next five years.
  • 3,700 km of roads to maintain. There are about 3,700 km of paved and gravel roads within the County. This is significantly more than the City of Grande Prairie, which has approximately 500 km. This year, the County is investing $21.2 million to manage several thousand kilometres of roads.
  • 10,800 km of pipelines. Of the County’s 10,800 km of pipelines, approximately 2,200 km require a buffer zone of 100 m on each side of the pipe (this varies). This buffer zone totals about 77,000 acres of land that cannot be developed and therefore, is limited in terms of its potential tax revenue for the County.

This revenue is critical for rural Alberta.

  • Compared to urban municipalities, rural municipalities, with smaller populations, need to spend significantly more per person to maintain basic infrastructure.
  • The County relies on revenues collected from linear property items to maintain its extensive infrastructure network.
  • A redistribution of revenues may result in the County being forced to reduce some of our financial support to local urban and rural organizations, as well as a short-fall for the maintenance and construction of bridge and road infrastructure.

The current taxation system is vital to the long-term sustainability of rural municipalities