Alberta: Upaid taxes leave municipal districts in financial pickle

HIGH PRARIE, July 16, 2025 – The municipal district of Smoky River No. 130 has sent a formal notice to other municipalities in the region providing a required six-month notice of potential withdrawal from shared services agreements.

The M.D. has faced high financial stress from uncollected taxes from oil and gas companies, after the Government of Alberta created policies to allow the companies to forgo paying municipal taxes.

Currently, the M.D. is carrying approximately $7.4 million in uncollected oil and gas taxes, a total that accounts for approximately 34 per cent of annual taxes, according to Reeve Robert Brochu.

“It is a legislative requirement for us to provide this notice of potential withdrawal,” says Brochu.

“We are hoping that we will not actually have to withdraw from funding any of these programs,” he adds.

Brochu explains provincial policy does not allow municipalities across Alberta to collect oil and gas taxes from companies choosing to not pay their dues. He adds they have not received their share of the taxes in nearly 48 months, putting severe stress on the municipality’s budget.

A formal letter of withdrawal was sent to the Town of Falher, Village of Donnelly, Village of Girouxville, and Town of McLennan, indicating if finances do not improve the M.D. will have to withdraw from Smoky River Regional Health Committee, Local Libraries, Falher Regional Pool, Family and Community Support Services, Smoky River Transportation, and Smoky River Economic Development.

“We have spoken to the Municipal Affairs minister and the premier to make them aware of our concerns, their government policies are beyond our control,” Brochu explains.

“They’ve promised they will find a solution.”

Brochu explains in preparing for the M.D.’s 2025 budget, council was forced to make several difficult decisions, including cancelling capital transfers, reducing mowing programs, and implementing general operational cutbacks.

He adds the letter sent to municipalities is just preparing for additional reductions that may have to occur if meaningful progress cannot be made in their tax collection efforts.

Brochu adds the notification is not an indicator they are withdrawing currently but is a procedural requirement prior to June 30 to withdraw withing six months, if necessary. He adds they are hopeful that the current sale of Long Run will be beneficial to them being able to collect the taxes in arrears.

Donnelly Mayor Myrna Lanctot expressed her concern, indicating she’s concerned there could be additional cuts forthcoming.

“Council has reviewed the M.D.’s recent communication with care and has expressed concern about the potential impact on several joint programs that benefit our community,” says Lanctot.

“While only some initiatives were referenced directly, we believe others may also be at risk and have included those in our response,” she adds. “We’re committed to maintaining a strong partnership with the M.D. and ensuring these programs continue to serve our residents effectively. We remain hopeful for continued collaboration and open dialogue.”

Individuals from the boards have declined to comment on the M.D.’s letter, noting they will first have to meet as boards to get a consensus on the issue before commenting.

Brochu stresses the last thing the M.D. wants to do is pull out of funding for these regionally funded initiatives, and he’s hopeful that there will be a solution from the Province forthcoming regarding oil and gas companies who have not paid their taxes.

Emily Plihal is a Local Journalism Initiative reporter with the South Peace News in High Prairie, Alberta. Title image: A sign welcoming drivers to the MD of Smoky River by Awmcphee made available under the Creative Commons CC0 1.0 Universal Public Domain Dedication.