The Council has canceled more than $4 million in tax debt owed through a bankrupt tar sands company at a facility northeast of Fort McMurray. A new company will buy the facility, but is concerned about the taxes that will be paid on the property.
Greenfire Resources Operating Corp. told the council at its meeting Tuesday that it would buy the McKay facility, but the unpaid tax bill was too much for that. Without help, they wouldn’t buy the property. The council said that if no one purchased the property, the facility would go to the Alberta Government’s orphan well program and the municipality would derive no benefit from the site.
Robert Logan, Greenfire’s chief executive and president, said his company has two facilities south of Fort McMurray that produce 20,000 barrels of oil per day. He said his company could get the facility up and running a year after buying the site. City documents submitted to the council show Greenfire has 14 tax accounts in smart status with the municipality.
The site was owned by Southern Pacific until it went into receivership in 2015, forcing a halt to production at the McKay plant. Viceroy Canadian Resources Corp. took control in 2018 and the board agreed to exempt it from taxes for 2016 and 2017.
Viceroy failed to pay taxes for 2018 and 2019, and did not pay the full purchase price of the assets. The company’s principal left Canada and remaining shareholders took control of Viceroy to form Everest Canadian Resources Corp.
The Board agreed in 2019 to write off more than $2. 1 million in taxes if Everest paid taxes between 2018 and 2020. Everest paid taxes for 2020, but the COVID-19 pandemic and falling global oil prices made it difficult to restart the facility. In 2020, the Council voted to defer taxes until 2022. An extension in 2022 pushed the deadline back to 2025.
Everest struggled to meet its tax requirements. In March 2023, the Alberta Energy Regulator suspended operations at the McKay facility and said Everest had not taken good care of the site. Later that month, the facility closed for non-compliance with environmental criteria and went into receivership.
The Council unanimously relieved it.
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vmcdermott@postmedia. com
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