Red Deer County gives oil company tax break

Red Deer County council has given an oil company more time to pay its back taxes citing its honest efforts to settle its bills.

Calgary-based Vantage Point Resources Inc. has paid back $2.4 million in taxes owed since entering a two-year payment plan with the county in June 2023. A final $861,000 balloon payment was due this month.

Facing a cash crunch, Vantage representatives reached out to the county to ask for another 19 months to pay. 

Under the terms of the deal recommended by county staff, Vantage will continue to pay back the $861,000 owing, with no late penalties applied, while keeping up to date on its new taxes, estimated at $750,000 this year and in 2026. The math works out to Vantage paying $125,000 a month, with all outstanding taxes paid off by December 2026.

Mayor Jim Wood said it should be recognized Vantage has been trying to repay its debts in “really trying times. For them to come to us and try to be in the good books of Red Deer County, I wish more would do this.

“I’m disappointed that the Province of Alberta hasn’t given us better tools. We have no other means. We can’t foreclose on their property. This is a whole lot different than any other situation we have in Red Deer County.

“I tell you what, every dollar we get from them is a dollar we may not have. These folks deal with many municipalities. I’m glad that they’re choosing Red Deer County to pay tax dollars in.

Assistant county chief administratice officer Dave Dittrick supported giving the company more time, pointing out they have paid back $2.4 million “which is incredible.”

Dittrick said administration supports giving the company a break on late payment penalties because it had already paid $500,000 in penalties by the time the payment plan agreement was signed in 2023, which included a freeze on further penalties.

“We feel they’ve paid enough,” he said.

Dittrick said Vantage’s chief financial officer has been in regular contact with Red Deer County. 

“We feel they’re in good faith making these payments and that we can trust they will get us to the finish line.”

About 30 other energy industry companies owe the county money but have made little or no effort to pay the money back. Of the handful of companies that took the county up on its offer to give them a break to a payment plan, only Vantage has not backed out.

“They are the only oil company that has maintained their tax payment plan. The others fell by the wayside,” he told council.

Coun. Lonny Kennett opposed the extension, which he said amounts to giving the company an interest-free loan.

“You could look at it that way,” said Dittrick. “I look at it as we have 31 or 32 oil companies that aren’t paying taxes. We have one company that is in arrears and wants to make amends to fix it.

“Their tax obligations are $750,000 a year. We just felt it was the best for Red Deer County in terms of our cash flow situation.”

Kennett said the agreement does not bring the company up to date on its current taxes and wondered if the company will be back asking for another extension in December 2026.

“To say, no interest. Fine. But to drag it out to the following tax year, that’s pretty concerning to me. Their other option would be go to a bank. Get the money and pay if off. I have a real problem with this and I just can’t support it at this time.”

It also shows the province that the county is willing to work with companies to settle their debts, he said.

Coun. Brent Ramsay said he struggled with giving the company a break, adding many oil and companies have exploited loopholes to get out of paying their bills.

“Now they’re trying to play catch-up on that because they’re trying to get their permits because the rules are changing. It is frustrating to see. I feel a little bit handcuffed on this.”

Anyone else would have to pay penalties on back taxes, he said.

Coun. Christine Moore said the province benefits from oil and gas companies and she supported the deal.

“They are working with us, and that’s a helluva lot of money. Contrary to what people think, it’s not easy in the oilfield right now.”

Coun. Connie Huelsman said it was “an excellent opportunity to at least gain some of the money back.

“I would hope there would be more oil companies that at least come forward and pay as well.”

Coun. Philip Massier said the county should not get “hung up” on levying penalties but focus on getting taxes paid.

“Hit them once with the penalty and then make an agreement that’s firm. That’s the way to do it,” said Massier.

“Thirty-two letters should go out to other oil companies that say this is how we work in Red Deer County. We’ll work with you.”

Coun. Dana Depalme said she was initially inclined to reject the agreement.

“These are high-dollar figures and it is good for the county to get the money instead of not getting anything at all.