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“It creates operational constraints, our ability to provide community services. We have non-profits asking for assistance. We say ’no’ more and more.”

Industry says the way taxes are assessed is driving companies out of business. Properties are assessed by the provincial government, which evaluates them on replacement cost and not on market value, said Ben Brunnen, vice-president of the Canadian Association of Petroleum Producers.

“We defend the need for the province to take a look at how assessment works and have it reflective of the market,” he said.

“A lot of these unpaid taxes are coming in jurisdictions where you’ve got assets that are older and not as productive or economic. The choice for these types of assets is to shut (them) in or find a way to reduce costs.”

Those shut-in wells often end up abandoned and unreclaimed after a bankruptcy, said Brunnen, who suggested some municipalities are going to have to accept less oil and gas revenue.

The Alberta Court of Appeal ruled last year that municipalities are unsecured creditors, which puts them at the back of the line for tax debt collection after a bankruptcy.

“Oilpatch property taxes are now voluntary,” suggested Regan Boychuk, a researcher with the Alberta Liabilities Disclosure Project, which works to understand the impact of old energy infrastructure.

McLauchlin, an oilpatch consultant, said about 40 per cent of unpaid taxes are from severely distressed companies in an industry hard and widely hit by lower resource prices. The rest of the shortfall is from companies that continue to operate but don’t pay.