The future is looking a lot brighter these days for developers and taxpayers in the northeast Alberta community of Cold Lake.
That's because the city's long pursuit of a better financial situation has yielded a commitment from the province to share millions of dollars of tax revenue annually with the oilsands city, population 14,500.
Under a deal that involves several municipalities, not to mention the quiet creation of a new provincially administered improvement district, tax revenue from oilsands plants on what's known as the Cold Lake Air Weapons Range will bolster city coffers starting in 2012. That revenue had been flowing only to Lac La Biche County. The county will in turn receive some compensation from Cold Lake. The Municipality of Wood Buffalo, which contains Fort McMurray, will lose some revenue to Lac La Biche County under the arrangement, but gain access to Crown land for development.
For Cold Lake, the deal means phased-in access to somewhere in the neighbourhood of $18 million annually in new property tax revenue, more than it's collecting from all its beleaguered taxpayers in 2011.
"We've been very consistent with regard to the city's concerns over its escalating infrastructure deficit combined with an unbalanced municipal tax base, which is comprised of mainly residential assessments," said Cold Lake Mayor Craig Copeland. "This was unsustainable and simply not viable."
The deal means a municipality that had been making noise over the years about shutting down development and dissolving into the surrounding Municipal District of Bonnyville will be in a much better position to handle future expected oilsands expansion in the area.
The MD will be paid $600,000 in 2012 by the city to maintain roads accessing its new cash cow, with that amount escalating in future years.
Interestingly, new provincial Premier Alison Redford has been fairly silent on the initiative, despite a flurry of media coverage in northeast Alberta.
As of November 1, the province had yet to issue even a news release on its controversial tax re-allocation scheme. Of course prominently announcing an about-face might seem risky for a government that 16 months earlier was telling Cold Lake it was sustainable under existing taxation models.
from Western Investor December 2011
