Letter to the Editor of Fort McMurray Today, December 11, 2015

Published on the Fort McMurray Today website at 5:07 PM, December 11, 2015

I am writing in response to the article published on 10-Dec-2015 related to the Oil Sands Community Alliance’s (OSCA) recent presentation to the Regional Municipality of Wood Buffalo council.

There is little doubt that the last 18 months have been especially difficult for both communities and industries in the Athabasca Oil Sands Area. The combination of low oil prices and continued financial market volatility has created challenges across the board and left many actively looking for viable solutions that will secure our region’s future.

Like so many others, industry has been forced to rethink, reassess and adjust our course of action accordingly.  And while many of the variables affecting key decisions are still unknown – consequence of COP21 Climate targets, provincial government Royalty Review as well as other provincial and federal government policies – where possible, industry has actively participated in finding solutions.

The municipality states that their taxation strategy contributes to the affordability of living and working in the region by ensuring urban and rural residential taxes are one of the lowest compared to major cities in Alberta.

The oil sands industry recognizes the important role of our tax contributions to support the quality of life in the region. Moreover, it is worth reflecting that industry collectively contributes over 90% of the taxes paid to the RMWB. This percentage represents the highest industrial tax base in the province and one of the largest in the country. In fact, a total of $660 million was collected from rural non-residential taxes in 2015 alone.

Our tax contributions allow the RMWB to build and maintain essential infrastructure and facilities.  This revenue base also facilitates services that are necessary to develop and maintain safe and viable communities including roads, parks, recreation, family and community supports, water, sewer and emergency services.

The municipality identifies that their fiscal management strategy is guided by the underlying principles of predictability, stability and transparency.

For the last 15 years, industrial tax contributions have been based on an objective and established assessment valuation process.  However, more recently, changes were imposed unilaterally to assessment processes.

In addition to concern that industry and provincial key stakeholders were not consulted regarding proposed changes, the impact of this new calculation sees previously excluded costs now included as part of the assessed value of major industrial projects.

The resulting increases in municipal taxes for non-residential ratepayers in the RMWB are significant.  The new assessment processes present a clear risk to our industry’s resilience, especially considering the unprecedented economic downturn and pending outcomes from the ongoing MGA Review.

Our presentation to the municipality outlined the struggles faced by many as well as potential approaches that may help ensure ongoing industry and community livelihood.  Ultimately, we are all in this together.

Whether it is intentional or not, the recent article is a disservice to the many hours and resources that have been invested into finding collaborative solutions that will benefit our region.

The article also fails to mention that OSCA’s suggestion regarding prudent taxation decisions was not the only item tabled with respect to fiscal restraint.  Several delegations presented concerns regarding proposed municipal budget growth in a tough economic climate.

If our collective goal is continued regional prosperity, then we must work respectfully together to retain our competitiveness, to provide infrastructure that meets local needs, to further our international reputation, and to attract and retain skilled residents. This will help ensure that we are all ready when oil prices eventually rebound.

Although the article suggests that the issue at hand is purely dollar related, OSCA’s concerns relate to due process and the lack of consultation in the lead up to taxation amendments. Raising concerns and looking for ways to work collaboratively are not signs of weakness. Our experience has taught us that we all share common interests for this region and open and frank dialogue is critical to the success of the region.

The challenges before us are complex and will likely extend well into 2016.  Our job is not to pit parties against each other, but rather to work collegially with one another to identify innovative strategies that will help the region reach its full potential.

Reegan McCullough
Executive Director
Oil Sands Community Alliance (OSCA)