Written by Keegan Rutherford
On October 26, 2017, the Province approved three Orders in Council, proclaiming the majority of the amendments to the Municipal Government Act (the “MGA”) into force either as of October 26, 2017, January 1, 2018 or April 1, 2018.
To see a summary of the MGA amendments which came into force on October 26, 2017, please see our article entitled Select MGA Amendments Proclaimed – What does that mean for you right now?
This article focuses on the MGA amendments in force as of January 1, 2018. The amendments to the MGA are significant, and this article focuses on those changes in force on January 1, 2018 and most likely to affect the regular operations and practices of municipalities. If you require further assistance in determining which amendments are currently in force, and what these changes mean for your municipality, please contact one of our Municipal Team members.
ASSESSMENT OF PROPERTY
- Designated Industrial Property (Section 284(f.01)): A new property type is now provided under Part 9 (Assessment of Property) of the MGA. “Designated Industrial Property” is defined to include facilities regulated by the Alberta Energy Regulator, Alberta Utilities Commission, or the National Energy Board; linear property; and property designated as a major plant by the regulations.
- Preparation of Assessment (Sections 292 and 289): Assessments must be prepared by either the provincial or a municipal assessor (or their delegate). Assessment of “Designated Industrial Property” is the responsibility of the provincial assessor. The municipal assessor is responsible for the assessment of all other property in the municipality. Required qualifications for assessors are provided under the Qualifications of Assessor Regulation, AR 233/2005.
- Assigning Assessment Classes to Property (Section 297): Municipal councils continue to be able to, by bylaw, divide class 1 (residential) into sub-classes on any basis they consider appropriate and, if they choose to do so, the assessor may assign one or more sub-classes to property in class 1. Under Section 297(2.1), a municipal council may now, by bylaw, divide class 2 (non-residential) into the sub-classes prescribed under the Matters Relating to Assessment Sub-Classes Regulation, AR 202/2017.
The non-residential sub-classes provided under the noted regulations include: a) vacant non-residential property; b) small business property; c) other non-residential property. “Small Business Property” means property in the municipality other than “Designated Industrial Property”, that is owned or leased by a business operating under a business license, or that is otherwise identified in a municipal bylaw, and has fewer than 50 full-time employees across Canada or a lesser number of employees as set out in a municipal bylaw as at December 31 or an alternative date established in a municipal bylaw.
Under the regulations, the tax rate set for class 4 “machinery and equipment” must be equal to the tax rate set for “other non-residential property” noted above, in order to raise the revenue required under Section 353(2)(a) of the MGA, which is to be used toward the payment of expenditures and transfers set out in the budget of the municipality. Further, the regulations provide that the tax rate set for “small business property” noted above must not be less than 75% of the tax rate for “other non-residential property” and must not be greater than the rate set for “other non-residential property”.
- Assessment Notices (Sections 308 - 311): Assessors must annually set a notice of assessment date, which must be no earlier than January 1 and no later than July 1. The assessor must also set additional notice of assessment dates for amended and supplementary notices. Dates for the amended and supplementary notices cannot be later than the date tax notices are required to be sent under Part 10 of the MGA (being before the end of the year in which taxes are imposed). Under Section 310, assessment notices must be sent no later than July 1 of each year and must be sent at least 7 days prior to the notice of assessment date. A designated officer must certify the date on which the assessment notice is sent.
- Supplementary Assessment (Sections 314 - 315): The municipal assessor must prepare supplementary assessments for machinery and equipment used in manufacturing and processing if those improvements are operational in the year in which they are to be taxed. Operational in respect of machinery and equipment is defined under Section 2(3)(b) of Matters Relating to Assessment and Taxation Regulation, 2018, AR 203/2017. The requirement to prepare supplementary assessments for other improvements, that are not “Designated Industrial Property” remain the same under Section 314 of the MGA and are the responsibility of the municipal assessor.
Before the end of the year in which supplementary assessments are prepared, the municipality must prepare a supplementary assessment roll, which must show, for each of assessed improvement, the following: a) the same information required to be shown on the assessment roll; b) in the case of an improvement, the date that the improvement i) was completed, occupied or moved into the municipality, or ii) became operational.
- Supplementary Assessment Notices (Sections 316 and 316.1): Other than for “Designated Industrial Properties”, municipalities must prepare a supplementary assessment notice for every assessed improvement shown on the supplementary assessment roll referred to in section 315(1) and send the supplementary assessment notices to the assessed persons before the end of the year in which supplementary assessments are prepared. Supplementary assessment notices must show, for each assessed improvement, the following: a) the same information that is required to be shown on the supplementary assessment roll; b) the notice of assessment date; c) a statement that the assessed person may file a complaint not later than the complaint deadline; (d) information respecting filing a complaint in accordance with the regulations.
- Access to Assessment Records (Sections 299 and 300): An assessed person may ask the municipality to let them see or receive a) information showing how the municipal assessor prepared the assessment for their property; and/or b) a summary of the most recent assessment of any assessed property in the municipality of which they are not the owner. The municipality must comply with a request regarding a summary of the most recent municipal assessment and such must include the information detailed under Section 300(2). Except where a complaint is filed under Section 461 of the MGA and the municipality is not obligated to respond to that request until the complaint has been heard and decided by an assessment review board, the municipality must also comply with a request by the assessed person relating to their own property. Municipalities may also request that similar information be provided to the municipality by the provincial assessor for “Designated Industrial Property” within the municipality.
- Assessment and Taxation of Farm Buildings (Matters Relating to Assessment and Taxation Regulation, 2018): Over the next 5 years, owners in both urban and rural municipalities will receive a tax exemption on farm buildings under the regulations (assessed at 50% in urban and completely exempt in rural).
- Maximum Tax Ratio (Section 358.1): Effective as of May 31, 2016, non-residential tax rates cannot be more than 5 times higher than residential tax rates in any municipality. There is a grandfathering provision applicable to “non-conforming municipalities” which have tax ratios greater than 5:1, as calculated using tax rates set out in its most recently enacted property tax bylaw as at May 31, 2016. The tax ratio “cap” for non-conforming municipalities is the tax ratio as of that date. However, if a non-conforming municipality’s tax ratio is lower than its previous “cap” in any subsequent year, that new ratio becomes the new “cap” thereafter. If at any time a non-conforming municipality’s tax ratio falls below 5:1, its new “cap” after that point will be 5:1.
- Brownfield Tax Incentives (364.1): Municipal councils may now, by way of bylaw or agreement, provide for full or partial exemptions from taxation or defer the collection of tax for “Brownfield Properties” for the purpose of encouraging development or redevelopment for the general benefit of the municipality. A “Brownfield Property” is defined as property other than “Designated Industrial Property” that is a commercial or industrial property when the bylaw is made or the agreement is entered into, or was a commercial or industrial property at any earlier time and, in the opinion of the council making the bylaw: i) is, or possibly is, contaminated; ii) is vacant, derelict or under-utilized; and iii) is suitable for development or redevelopment for the general benefit of the municipality when a bylaw is made or an agreement is entered into. Requirements for such bylaws and agreements are provided under Section 364.1(3) and 364.1(12) of the MGA respectively and each requires a public hearing in accordance with Section 230 after giving notice of it in accordance with Section 606.
- Supplementary Property Tax Bylaw (Section 369(2.01)) – A municipal council may pass a bylaw authorizing it to impose a supplementary tax for “Designated Industrial Property” if it passes a bylaw authorizing it to impose a supplementary tax in respect of all other property in the municipality.
ASSESSMENT REVIEW BOARDS
- Board Constitution and Jurisdiction (Sections 454, 460.1(1) and 460.1(2)): Municipal councils must by bylaw establish both local assessment review boards (“LARBs”) and composite assessment review boards (“CARBs”). Neither of these boards has jurisdiction to deal with complaints about “Designated Industrial Property”, which are to be heard by the Municipal Government Board. For reference:
- LARBs have jurisdiction to hear complaints about any matter referred to in Section 460(5) that is shown on a) an assessment notice for residential property with 3 or fewer dwelling units or farmland, or b) a tax notice other than a property tax notice, business tax notice or improvement area notice; and
- Subject to not being able to deal with complaints relating to “Designated Industrial Property” or about an amount prepared by the Minister under Part 9 of the MGA as the equalized assessment for a municipality (Section 460(14)), CARBs have jurisdiction to hear complaints about a) any matter referred to in Section 460(5) that is shown on i) an assessment notice for property other than those described above with respect to LARBs, or ii) a business tax notice or improvement tax notice, or b) a designated officer’s decision to refuse to grant an exemption or deferral of taxes relating to a “Brownfield Property”.
- Judicial Review (Section 470 and 508.1): Decisions by both the MGB and assessment review boards can now be challenged by way of an application for judicial review before the Court of Queen’s Bench. This means that: 1) there is no leave requirement, so the process only consists of one step now; 2) a broader range of issues can be challenged, including findings of fact; and 3) a challenge may be brought within 60 days after the date of a decision by these bodies as opposed to the 30 days previously.
SUBDIVISION AND DEVELOPMENT APPEAL BOARDS (“SDAB”)
- Board Composition (Section 627): Unless authorized by an order of the Minister of Municipal Affairs, a panel of a SDAB hearing an appeal must not have more than one councillor as a member.
- Immunity (Section 628.1(1)): SDAB members are not personally liable for anything done or omitted to be done in good faith when performing their duty or functions under Part 17 of the MGA. Further, no SDAB member will be liable for costs by reason of or in respect of either an application for permission to appeal or an appeal under Part 17 of the MGA.