Natural Resource Extraction Support Tax Incentive Bylaw

The Natural Resources Extraction Support Projects Tax Incentive Bylaw establish guidelines and procedures for providing exemptions from municipal taxes on Natural Resource Extraction Support Projects. This measure aims to encourage the development or revitalization of properties in non-residential and machinery and equipment assessment classes for the overall benefit of the Regional Municipality of Wood Buffalo.

In late 2019, the province took a significant step towards enhancing economic growth and development by introducing Section 364.2 to the Municipal Government Act (MGA). This new provision empowers municipalities to offer targeted tax exemptions to encourage new commercial or industrial investments.

The Natural Resource Extraction Support Project refers to a project that provides assistance to the natural resource extraction industry. This may include, but is not limited to, projects that involve manufacturing parts and equipment used by the industry, repairing equipment used by the industry, researching, and developing new products and technology used by the industry, and upgrading or reusing waste or byproducts of the industry.

The deadline for applications is December 31, 2024.

Eligibility Requirements for the tax incentive agreement

Construction project should be:

a new development or expansion of an existing facility
have a minimum of $25 million and a maximum of $500 million Canadian dollars in eligible capital costs
employ over 250 personnel during construction or employ 15+ skilled workers (job that requires a degree, certificate, or trade credential)
support natural resources extraction
not be linear property as defined by the Municipal Government Act
commence construction after this bylaw comes into effect.

Property requirements

To be considered for a Tax Incentive Agreement, the property or development project must fulfill the following requirements:

be situated within the Tax Incentive Zone.
obtain all the necessary development approvals.
comply with all the terms of the development agreement and the Safety Code Act during the agreement period and not face any foreclosure or violation.

Applicant Requirements:

must be the Assessed Person or have authorization from the Assessed Person
must not have any outstanding debts or amounts owed to the Municipality

should not be undergoing bankruptcy or receivership

must adhere to the terms and conditions of any grant or other financial assistance received from the Municipality,
should not be engaged in any legal disputes against the Municipality.

Details on exemptions

The Bylaw exempts only municipal property taxes. The Tax Incentive Agreement exempts taxes for non-residential and machinery/equipment parts of the qualifying property based on a formula of 1% of their respective eligible capital costs.

If the applicant offers an employer-assisted housing benefit, the Tax Incentive Agreement will exempt taxes for the non-residential and machinery and equipment parts of the qualifying Property, up to 1.5% overall. However, the Municipality decides if the benefit is sufficient for this Bylaw. Eligible Capital Costs, including machinery and equipment expenditures and non-residential.

The property must be allocated to each property class for accurate exemption calculation. The qualifying property will receive a maximum 80% exemption on the incremental increase from the base tax amount for eligible tax years in the Tax Incentive Agreement.

This Agreement is valid for up to ten consecutive taxation years or until maximum exemption is reached. The taxation exemption period begins when the applicant’s development is operational.

Application process

If interested in applying for this program, please contact cos.office@rmwb.ca. The deadline for applications is December 31, 2024.

Resources

Bylaw No. 24/016 - Natural Resource Extraction Support Project Tax Incentive Bylaw

Council Presentation

Tax Incentive Zone Map