The AAMDC is pleased to share news that the Hon. Doug Griffiths, Minister of Municipal Affairs, has committed to renewing the current Well Drilling Equipment Tax (WDET) regulation for a further five-year period. This past spring, the AAMDC participated in Municipal Affairs’ review of the WDET regulation which also included representatives from several rural municipalities, the Alberta Rural Municipal Administrators’ Association, the Alberta Urban Municipalities Association, and the oil and gas industry.

The review identified a number of complex issues which have been summarized in a report titled, Well Drilling Equipment Tax Stakeholder Consultation Report. The report is expected to be available on the Municipal Affairs website in the near future.

Due to the complexity of the issues, all stakeholders acknowledged that a more comprehensive review is needed in order to develop a long-term solution to road damage related to oil and gas development. The Minister will grant the five-year extension to allow time for that discussion to continue. In a letter to the AAMDC, Minister Griffiths stated, “In the meantime, I would also like to encourage municipalities and industry to work together to plan road use prior to the commencement of drilling activity. This collaborative work will not only increase communication, but also assist to mitigate future issues”.

In 2012, the WDET provided $39 million in funding to rural municipalities. As such, the AAMDC recognizes the importance of the WDET in supporting rural road infrastructure projects. During the review, the AAMDC brought forward several issues including the need for the WDET to apply to re-workings of existing well sites (7-11F), the need for formula adjustments to better compensate for shallow well activities, and the need for an overall increase in compensation levels.

While no changes have been made to the WDET, we are pleased with the Minister’s decision to renew the existing regulation and we look forward to continued discussion on how the regulation can be improved to support the needs of all members.

Enquiries may be directed to:

Darren Reedy

Policy Analyst

780.955.4096

Kim Heyman

Director of Advocacy and Communications

780.955.4079

 

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