The Alberta government says its short term relief plan will help shallow gas producers cut costs, protect jobs and remain competitive while dealing with economic pressures facing the natural gas industry.
The Alberta government recently announced a plan to offer tax relief to struggling shallow gas companies operating in rural municipalities across the province.
Al Kemmere - the President of the Rural Municipalities of Alberta (RMA) - says municipalities may offer impacted companies a reduction of up to 35 per cent on well and pipeline taxation. He adds, it will then be reimbursed by the provincial government by an equivalent reduction in the Alberta education property tax requisition amount.
Kemmere says RMA does not feel that property tax should be the tool that these companies use to become viable.
He explains how the Alberta government will be reimbursing municipalities for the shallow gas tax relief program.
Kemmere adds that RMA encourages municipalities that look at this as an option for this year to make sure the 65 per cent of the property taxes that are due, are collected properly from the shallow gas companies before the full relief of the 35 per cent is given.
Kemmere explains what concerns he has with the province's shallow gas tax relief plan.
According to the province, the qualifying properties - about 65,000 wells and their associated pipelines located predominantly across 15 municipalities - will receive more than $23 million dollars in total support.
A press release from RMA notes that there is currently a review being undertaken to update assessment values for wells and pipelines, which is expected to be complete later this year and the changes are expected to be implemented for the 2020 tax year.