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Collection of Tax Arrears

Res #: 5-21M
Number: 5
Year: 2021
Midterm: Yes
Expired: No
Responses Received: No
Departments: Ministry of Energy and Resources
WHEREAS the ability of municipalities to collect arrears from resource companies is limited; and WHEREAS the Tax Enforcement Act and the Municipalities Act provide for the collection of tax arrears by issuing a direction to pay to the purchaser of a resource as a means of collecting arrears from a resource company; and WHEREAS the practices of the Ministry of Energy and Resources has made utilizing this option difficult and municipalities find it difficult to source the purchaser of the resource, or the amount generated from a direction to pay pursuant to Section 317 of the Municipalities Act which may not be sufficient to cover the taxes due; and WHEREAS the process of tax enforcement is limited in its effectiveness for non-producing and low production wells; and WHEREAS there are mechanisms in place that could streamline tax enforcement procedures for municipalities when dealing with arrears of resource companies, namely the procedures that the Ministry of Agriculture has in place for lease land where an administrator in a municipality notifies the ministry regarding arrears of taxes to the Ministry and the lease may be cancelled if arrears are not paid or a payment plan for the arrears of taxes is not mutually agreed upon. BE IT RESOLVED that SARM lobby the provincial government to amend the Municipalities Act, the Tax Enforcement Act and the Oil and Gas Conservation Act to have the operating license of a resource company suspended if they do not keep municipal taxes current.