People in work camps, are more likely to be declaring residence somewhere else, and the city says its costing the province hundreds of millions of dollars in lost taxes.
The city’s Director of Government Relations Mike Evans says it comes back to the issue of the province releasing land to the city.
“If we could get the land release in Fort McMurray that allows us to take on more residents, there would be more taxes and more royalties paid in Alberta, all of which contributes to general revenues and could be invested in roads, water treatment plants, better quality buildings, healthcare and even education.”
He says if people left work camps, and took up permanent residency, it would reduce the drain on royalty payments and it would increase prosperity for all Albertans.
He conservatively estimates the province to be losing up to $200-million every year.
“Working on the basis that 40-thousand people are currently living in camps, and guessing that half of them comes from out of province and are making an annual income of $100-thousand- which is a low estimate- and are paying their 10 percent flat tax on top of that…equals $200-million in provincial taxes that are being paid in other jurisdictions every year.”
He says the key remains a land release that allows Fort McMurray to grow in response to growth in the oil sands.
“That’s the key number one issue, we understand that there’s a temporary construction labour force and there always will be one in the oil sands, but the companies prefer and of course we’d prefer if operational workers took up residency in the community, moved here with their families and became part of the fabric of Fort McMurray.”
The province is the licensing agent for work camps.
He says that the city is working with it on harmonizing regulations to make sure that work camps are compliant with municipal rules as well as provincial rules.
“The big thing is that they have to complete this land release to the municipality and help us improve the transportation number so that we can be home to greater numbers of people, I mean that’s really the only thing they can and should do to fix this issue.”
The provincial and federal governments are the only bodies to get income taxes, the province collects royalties the feds get other money from oil sands development, and the municipality gets money only in property taxes and a small amount in user fees.
“The municipality of course directs virtually all of its tax revenues toward providing services to residents, including people who declare their residence to be somewhere else.”
He says the biggest impediment for the province to release the land bank, is that there are 11 companies who have sub surface leases on the land the municipality would like to have for urban development.
“I’ve said in the past and this is council’s position and we maintain it…it’s not about Fort McMurray versus one or two companies where we have a conflicting interest, it’s about the ability of Wood Buffalo and Fort McMurray in particular to be a host for the industry for the next 50 to 100 years.”
He believes that the Department of Energy and the Oil Sands Secretariat recognize the challenges, but that its challenging because their also being effectively lobbied by oil sands companies that want to exploit the resources on the leases that they hold.
March 5th, 2013
