Regional Municipality of Wood Buffalo (RMWB) mayoral candidate Don Scott says that after broad-ranging discussions with members of the community and representatives of industry and government, it is clear that the regional economy, particularly as it relates to the issues surrounding Bill 21 and fly-in, fly-out (FIFO) operations at oil sands sites, will need to be a top priority for the next municipal government.
“Since announcing my mayoral candidacy in March, I have been meeting with a number of community stakeholders, and what has become very clear is that Bill 21 and FIFO present a serious economic challenge and must be addressed to ensure sustainability and viability of this region and our communities,” said Scott.
Bill 21 is the provincial legislation that has the potential to change the ratio of taxes municipal governments are able to collect from industry in proportion to taxes from residents of the municipality. Currently this ratio in the RMWB is as high as 18:1; Bill 21 proposes this ratio can be no larger than 5:1, representing a significant change in the potential municipal tax burden for residents of the RMWB.
“Add in the current price of oil, and we are facing the perfect storm of economic challenges in this region as we grapple not only with the rebuild of our communities subsequent to the devastating wildfire of 2016, but also with addressing the impacts of these issues that primarily relate to our main industry and revenue stream,” said Scott.
“One of the most concerning facets of Bill 21 is the lack of clarity from the provincial government. We must gain clarity on this issue and understand the exact impact it will have as we begin to make decisions for the future of this region,” Scott adds.
FIFO is the industry practice of flying oil sands site employees in and out of their operations as opposed to encouraging employees to reside in the Wood Buffalo region, with employees practicing FIFO often foregoing use of the Fort McMurray International Airport to use private airstrips.
“FIFO is a significant issue given that this practice means these oil sands employees are not living in our region and thus not contributing to our communities in a financial or social sense. While both FIFO and Bill 21 serve industry well, they do not contribute to our communities and region,” says Scott.
Scott summarizes: “I am a person who is optimistic about our region. We have tremendous people and Wood Buffalo has always been a place of great opportunity. A significant challenge is before us. Residents are leaving the community, industry is accommodating fly in and fly out employment and the provincial government is enacting Bill 21 which will radically shift the municipal tax structure of our region. These combined issues have the potential of lower house values, reduced government services and increased residential taxes, potentially resulting in more people and businesses leaving the region.
Our residents currently pay a very small proportion of the municipal tax base. While politically attractive, this coupled with spending that significantly exceeds the per-person average in Alberta has put our region on a course that is unsustainable. I have spoken with industry. They pay approximately 90% of the municipal tax base. They have little incentive to have people live in our region because every dollar the municipality spends on infrastructure or services is ultimately a bill for which industry pays 90%, and our per capita municipal spending is far higher than other municipalities in the province. Industry has achieved the result they want with Bill 21, which will dramatically shift the tax base away from industry toward residents. The problem is that the municipality receives no benefit in return. Industry is given no incentive and has made no commitment to have people live in the region but at the same time they will see their contribution to the region diminish significantly by way of lower taxes. We need a new deal with our industry partners and a new working relationship that ensures a mutually beneficial outcome for all parties. Even a gradual implementation of the tax structure change will present significant and serious consequences if the issue of FIFO is not also addressed.
A potential solution is a phased in tax reduction for industry in exchange for a commitment that the majority of their employees will be sourced from our region and our airport will be the primary hub for remote work sites. Our municipal spending must at the same time move in a direction more consistent with the rest of Alberta.
Any result that does not address FIFO is not acceptable. If industry is not prepared to voluntarily reduce fly in and fly out, we may need to impose financial disincentives so that fly in and fly out is not economically feasible. This is not the preferred route given the challenges industry is facing. A binding agreement that achieves the goals of both the municipality and industry is the approach I will pursue if elected Mayor. Any agreement that does not satisfy the goals of both industry and the municipality threatens the sustainability of the region.
We will also need to work with both the provincial and federal governments to ensure industry has road access from our region to provide for reasonable commute times. We will also need to ensure that the municipality intervenes on every occasion when industry goes before any board or tribunal seeking an expansion or permission to operate in the region, seeking conditions whenever possible that employees will reside in the region.
I believe these challenges can be addressed, but doing so will require strong leadership, an ability to develop and foster relationships with all stakeholders and a firm belief in a bright future for our region and our residents. The success of our region will be rooted in a mayor and council prepared to confront these issues and ensure the long-term viability of the region, its residents, businesses and industry. Not every decision will be politically popular but this region has come to a reckoning. I stand ready to take on this challenge should I secure the confidence of voters in October 2017 and be elected as Mayor of the RMWB. My goal will be to ensure our region is sustainable, viable and prepared for a stronger tomorrow.”
To learn more about Don Scott’s platform or to get involved in his campaign for a stronger tomorrow, please visit donscott.ca.