Oil is rebounding, but rural municipalities are waiting on their bills

Oil is rebounding, but rural municipalities are waiting on their bills

By Nick Pearce, Local Journalism Initiative Reporter

Rural municipalities in northwest Saskatchewan are chasing after millions of dollars in unpaid taxes from struggling oil companies as prices rebound.

They hope to recover the money as the West Texas Intermediate oil price fetches near $70 per barrel after cratering during the pandemic. If they can’t, rural ratepayers may be left holding the bag.

Manitou Lake Reeve Brian Graham hopes to recoup $395,866 owed by five oil companies. His municipality is one of several in Saskatchewan that’s out money because oil and gas companies working within their borders declared bankruptcy in recent years.

Over the last four years, the RM of Manitou Lake has written off $1.5 million in municipal taxes it couldn’t collect from oil and gas companies.

In 2015, the municipality lost $402,000 as a struggling oil company hit receivership, followed by another $1.3 million when the company that bought it did the same, he said.

Transporting heavy oil in Manitou Lake takes a toll on local roads; the taxes from oil companies are supposed to help maintain that infrastructure. When the money’s not available, it tightens municipal budgeting, said RM administrator Joanne Loy.

The bankruptcies also result in leases going unpaid, while local suppliers and contractors lose business.

“Oil and gas is a very big part of Saskatchewan’s economy, so it’s important to keep it here because it creates jobs and business for restaurants, grocery stores, clothing stores, and housing,” Loy said.

This item is reprinted with permission from the Saskatoon, SK, Star Phoenix. For the complete article, click HERE

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