Oilpatch tax evasion sparks citizen tax strike
On January 22nd, 2020, Alberta Liabilities Disclosure Project Member David Swann announced a personal tax strike to demand Alberta’s Premier hold oil and gas companies accountable for $173 million in unpaid rural taxes they have evaded without consequence.
About the Tax Strike
Dr. David Swann announced he would be withholding tax payments this year from the Municipal District of Foothills on his property in protest of the Kenney government's double standard on taxes. Others wanting to join him should:
Research the legal and financial implications of tax defaulting. In Alberta the general guidelines for tax defaulting can be found at Alberta Municipal Affairs website - Tax Recovery (a complete guide is here). Each municipality decides its specific due dates and fines for late filing of taxes.
If you hear back from one of your representatives with a notable response to the protest, let us know about it:
Press Release: Tax strike (January 2020)
FOR IMMEDIATE RELEASE
Regan Boychuk, Alberta Liabilities Disclosure Project
Oilpatch tax evasion sparks citizen tax strike
Former MLA won’t pay provincial taxes to protest Alberta government’s double standard on industry’s unpaid taxes and bailouts.
January 22, 2020 (CALGARY, AB) — Former Alberta MLA, Dr. David Swann, announced a personal tax strike to demand Alberta’s Premier hold oil and gas companies accountable for $173 million in unpaid rural taxes evaded without consequence.
“I am outraged that Premier Kenney condones this tax evasion in the oilpatch, where viable companies refuse to pay what they owe for the roads they use, schools that train their workers, and services that support their operations. Who knew paying your taxes is optional in Alberta?” says Swann, a member of the Alberta Liabilities Disclosure Project (ALDP).
“I am not paying my provincial taxes until these companies pay theirs. I urge others to join me. Our government shouldn’t have one set of rules for their corporate friends, and another for the rest of us Albertans.”
According to the Rural Municipalities Association, more than $100 million (or 60 per cent) of those unpaid taxes are owed by companies that continue to operate, but simply won’t pay their taxes.
“These companies are brazenly flouting provincial laws and cheating hardworking families who pay their taxes,” says Swann. “They have pocketed record profits, received a $4.7B tax cut, paid generous salaries to their executives, and now want Albertans to pick up their quarter trillion cleanup and tax bills.”
Swann and other ALDP members call on Premier Kenney to protect Albertans from dine-and-dash oil and gas companies by stopping this growing tax evasion and ending their public bailouts and property tax cuts.
“We all know the Alberta government’s first instinct is more oil patch subsidies and lower taxes. That failed strategy is unacceptable now,” adds Regan Boychuk, ALDP’s lead researcher and oilfield liability expert.
“If these companies are operating, they can and must pay their taxes. And local governments need the power to collect unpaid taxes before companies escape into bankruptcy,” says Boychuk.
“It’s unethical for the oilpatch to dine on the profits of our public resources, and dash on their dues to the community,” says Swann.
“With this strike, I’m standing in solidarity with all Albertans getting the bad end of this deal.”
Last July, Alberta government announced a 6-month, $20 million oilpatch property tax subsidy for ~70,000 shallow gas wells and related pipelines. In 2020, that subsidy burden was shifted to already cash-strapped rural municipalities.
Local officials lack authority to force asset sales on Alberta’s oil and gas industry. Unlike when citizens don’t pay their bills and their cars and/or homes can be sold, municipal authorities cannot sell wells or other properties for tax arrears. That obviously needs to change.
Even though so many companies cannot afford basic operating costs, the Alberta Energy Regulator refuses to use its power to wind down insolvent companies or pursue former owners for cleanup costs.
According to the Rural Municipalities Association, 2018-19 saw $173 million in unpaid oilpatch taxes. $81.5 million in unpaid taxes in 2018 was unprecedented, but accelerated by 114% to $91.5 million in 2019.
More than $100 million of that unpaid rural tax total is owed by companies still operating (i.e. not yet bloodless stones), but who refuse to pay their dues. It’s oilpatch tax evasion, condoned by the current and previous governments.
Unpaid taxes are leaving a hole in budgets of rural municipalities, and forcing them to cut essential services and raise taxes on their residents to pay the oilpatch’s bills.