Municipal Oil and Gas Collection of Taxes

Res #: 12-23M
Number: 12
Year: 2023
Midterm: Yes
Expired: No
Responses Received: Yes
Departments: Saskatchewan Ministry of Government Relations

WHEREAS oil and gas tax enforcement remains a problem for municipalities and some rely heavily on the effective collection of taxes in order to manage their budget.

WHEREAS previous resolutions dealing with this topic have been passed at the SARM convention and little or no action has been made.

BE IT RESOLVED that SARM lobby for continued efforts towards improving legislation that would provide effective collection of municipal oil and gas taxes.

Responses From: Saskatchewan Ministry of Government Relations & Saskatchewan Ministry of Energy and Resources

December 7, 2023

  • The Ministry of Government Relations (GR) continues to discuss and work on this issue with the Ministry of Energy and Resources, the Saskatchewan Association of Rural Municipalities (SARM) and the Canadian Association of Petroleum Producers (CAPP).
  • In summer 2022, GR with SARM and the Rural Municipal Administrators Association (RMAA) undertook efforts to increase awareness of the existing legislative authority municipalities can use to collect oil and gas tax arrears. This included articles in the June 2022 issues of Municipalities Today and SARM’s Rural Sheaf that were emailed to all rural municipalities (RMs). GR and SARM officials also held a workshop in August 2022 with legal experts from the Ministry of Justice and Attorney General and a private law firm, that was attended by elected and administrative officials from six RMs.
  • GR obtained legal advice that indicates The Municipalities Act already allows RMs to do what the recent changes in Alberta legislation allow, regarding liens and seizing and selling oil and gas assets in arrears. These provisions allow the goods of a company in arrears, located anywhere in the RM, to be seized/sold to recover arrears.
  • GR is working with the Ministry of Energy and Resources and CAPP to support the provisions in Section 317 of The Municipalities Act that allow RMs to notify, or issue a demand letter, to a purchaser of oil and gas of a producer in arrears stating amounts owing be paid to the RM. Some RMs have had success with this tool. Municipalities may contact the Ministry of Energy and Resources service desk by email at to request oil purchaser information. GR is working with CAPP regarding contact information for that association’s members.
  • The remedies to collect oil and gas tax arrears are more complex than for other types of titled property under The Tax Enforcement Act because the property is equipment which can be moved and is not easily That is why municipal legislation allows liens to be placed on the equipment and for RMs to seize a delinquent company’s goods located anywhere in the municipality. It also allows RMs to have oil and gas purchasers redirect their payments to RMs and to sue companies for tax arrears.
  • Municipalities are encouraged to use these tools to their fullest extent, and partner with other municipalities in the same situation in the use of these measures before an oil or gas company enters receivership or Bankruptcy falls under federal jurisdiction, and any amendment to provincial legislation will not affect the application of federal bankruptcy legislation for companies in receivership or bankruptcy.
  • GR will continue to work on this issue with the Ministry of Energy and Resources, SARM and other stakeholders, and invites RMs to identify specific legislative or process changes and improvements that could help address oil and gas property tax arrears for consideration when municipal legislation is next open for amendment.

The Honourable Don McMorris – Minister of Government Relations, Saskatchewan Ministry of Government Relations

December 18, 2023

  • The Ministry of Energy and Resources (ER) is aware of the challenges facing municipalities due to unpaid property taxes. ER officials have developed a new Corporate Health Test, which requires all companies to submit financial information on an annual basis including reporting total debts owing, which could include RM
  • At this time, ER is only able to make regulatory decisions in consideration of financial debts owed to the Crown. However, the Corporate Health Test will enable ER to identify companies in financial difficulties in a timely manner and potentially deny further licences, prevent licence transfers or require additional
  • The ER will continue to look at opportunities to ensure that oil and gas licensees meet their obligations.

The Honourable Jim Reiter – Minister of Energy and Resources, Saskatchewan ministry of Energy and Resources