File photo. (THE CANADIAN PRESS/Jason Franson)

Premier Jason Kenney tried to build a stronger case with rural municipalities Wednesday for a property tax exemption for energy companies drilling in their boundary lines.

Last month, the province announced companies drilling new wells or building new pipelines would not have to pay property tax, and the elimination of the well-drilling equipment tax for new drills.

The Rural Municipalities of Alberta association has estimated its members are owed millions of dollars in unpaid taxes by the oil and gas industry.

On Wednesday in a speech to the RMA fall convention, Kenney echoed previous government statements the exemption is a balanced approach to the issue.

“We have seen many of our – particularly our dry, shallow gas producers – teetering on the verge of bankruptcy. We did see a number of failures last year,” he said in an address at the RMA 2020 fall convention.

“We did not want to end up killing the goose that has helped to lay the golden egg for rural municipality revenues, for jobs, for the local rural economy.”

According to the premier, some companies were paying more property taxes than the value of their assets.

The exemption will begin 2022.

The RMA president said his members will support the program, but that it will be a challenge. 

Kenney thanked the municipalities for their cooperation in developing the exemption program, and new Municipal Affairs Minister Tracy Allard for the “reasonable solution.”

“It’s not perfect. As you know, these are incredibly complex issues, but we all have to play our part in ensuring a future for jobs in rural Alberta.”


With the rural leaders as his audience, the premier also used the podium to ask municipal leaders to remind their constituents of the dangers of COVID-19.

He said the health-care system could face a “very serious challenge” if cases continue to climb by the hundreds each day, the way they have for several weeks in Alberta.

“We have seen significant spread in various times in the past nine months in rural communities and we have, I think, seen in some communities a skepticism… about the danger that COVID poses,” he commented.

“We need to convey to people that if the current trends continue, we’re going to have to move more and more people out of acute care beds, delay more and more surgeries.”

The RMA convention was turned into a virtual event and rescheduled for Nov. 3 and 4 because of the pandemic.