Town of Vegreville Throws its Support Behind Bill C-221
Vegreville town council decided on April 27 to send a letter of support to Lakeland MP Shannon Stubbs private members bill, C-221 that is expected to be debated in the House of Commons in the coming weeks.
Bill C-221, The Environmental Restoration Incentive Act, is designed to help struggling small and medium oil and gas producers, specifically, to decommission old and inactive wells.
In the MP’s letter to council, she stated, “Rural municipalities face significant economic impacts with over $173 million in unpaid property taxes. While this bill will not immediately recover all the taxes owing to municipalities, the benefits of Bill C-221 are two-fold: first, this bill will help producers to continue operating and paying taxes; secondly, this bill will help producers permanently decommission wells they no longer use, reducing future environmental liabilities in your community.”
Stubbs said the bill would incentivize and ensure private sector proponents can fulfill environmental responsibilities at the lowest public cost. “This will be accomplished using something called flow-through shares, which Bill C-221 requires the government to consider and report on.”
She explained that “Flow-through shares allow a company to attach a tax credit to a specific stock. In this way, the benefit of the tax credit ‘flows through’ to the purchaser of the stock which is typically an investment fund.
The tax credit creates the profit margin on a stock that is not growing in value, creating an incentive for external investors to invest in companies with low growth potential to raise money from the private sector. Bill C-221 creates the specific tax credit for well-decommissioning costs that will be attached to flow-through shares, which is of immediate benefit.
She went on to say, “A real difference can be made right away, with a tax credit that can only be used the year a well is decommissioned and will only be for small and medium producers that need it the most. It will help steward the environment, create jobs for oil and gas workers right away, and protect taxpayers.”
Mayor Tim MacPhee commented, “I personally think anything that will help the situation locally with small and medium-size oil companies, and hopefully the provincial and federal governments will be on board with these flow-through shares. I know they’ve helped other industries get back on track.”
Coun. Tina Warawa said the bill was not a bail out, but it would allow for the remediation of orphan wells. “It can be an issue with our neighbouring municipality Minburn County.”
Coun. Dave Berry said, “I think we could certainly support it and send a letter to her.”
The motion was carried unanimously.
To date, Bill C-221 has received the support of more than 30 municipalities as well as the support of all the MLA’s in the Lakeland constituency, including Fort Saskatchewan-Vegreville MLA Jackie Armstrong-Homeniuk. Premier Jason Kenney and Finance Minister Travis Toews have also endorsed the bill.