WHEREAS Bill 21, the Modernized Municipal Government Act (MMGA) has created the new property type of Designated Industrial Property to be assessed by the new position of Provincial Assessor; and
WHEREAS Designated Industrial Property means: facilities regulated by the Alberta Energy Regulator (AER), Alberta Utilities Commission (AUC), or the National Energy Board (NEB), linear property, railway, and major plants as designated by the Minister in the regulation; and
WHEREAS sufficient conflict and ambiguity in the definitions between the MMGA and the draft regulations exist leaving municipalities open to significant risk in their primary funding model – property taxation; and
WHEREAS there is no published defining criteria on which the designation of ‘major plant’ is based; and
WHEREAS the valuation standard(s) for Designated Industrial Property are yet to be determined, published, and implemented by the Minister; and
WHEREAS studies of the impacts resulting from the draft regulatory definitions have not been completed and discussed with the affected municipalities; and
WHEREAS there has been little effort made to communicate the changes and impacts with municipalities and their representatives in a collaborative fashion; and
WHEREAS under the transitionary model contracts for services have not been fully communicated to municipalities so municipalities may understand their responsibilities, the delegation of authority, reimbursement methods, levels and frequency of communication, and right of appeal, and/or the methodology related to the exchange of information between the Government of Alberta and the municipality; and
WHEREAS the capacity and qualifications of the Provincial Assessor and his/her staff is unknown; and
WHEREAS implementation of the components of this initiative must occur prior to January 1, 2018 in accordance with Statute;
THEREFORE, BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties request Alberta Municipal Affairs to delay implementation of the centralization of industrial property assessment until such time as Ministry personnel can procure the appropriate resources to develop valuation standards, regulated assessment rates, undertake and complete impact studies, communicate and collaborate with municipalities so the identified risks to their primary revenue structure can be mitigated throughout the transition and beyond.
3-16F: Implementation of the Centralized Property Assessment
THEREFORE, BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties call upon the Government of Alberta to delay or repeal the establishment of the Centralized Industrial Property Authority and the creation of the Provincial Assessor until such time as the appropriate studies, pilot projects, and consultation with all effected property owners has been completed and analyzed so the effectiveness of such a policy may be fully understood;
FURTHER BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties call upon the Government of Alberta to consult with the Alberta Association of Municipal Districts and Counties and the Alberta Assessors Association in order to answer the numerous procedural, policy and legal questions which arise from the decision to create the Centralized Industrial Property Authority under the newly created position of Provincial Assessor.
DEVELOPMENTS: The Government of Alberta response does not indicate a willingness to delay or repeal the process of transitioning to centralized assessment for designated industrial property. The response indicates that the Government of Alberta received sufficient feedback in favor of the move to centralized assessment during previous MGA consultation opportunities to warrant the decisions being final. The AAMDC appreciates the Government of Alberta’s willingness to share as much information as possible with municipalities related to procedural changes, but this does not address the intent of the resolution. With this in mind, this resolution is assigned a status of Intent Not Met, and the AAMDC will continue to advocate on this issue.
The AAMDC and several AAMDC members have been involved in the planning of the transition to centralized industrial property assessment with the intent to minimize the disturbance to municipalities and assessors.
4-16F: Centralized Industrial Assessment
THEREFORE, BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties lobby the Government of Alberta to leave the responsibility of industrial assessment with municipal governments and to provide local assessors with updated manuals and regulations required to perform the services they currently provide to municipalities for industrial assessment.
DEVELOPMENTS: The Government of Alberta response does not indicate a willingness to leave the assessment of industrial property as the responsibility of municipal assessors. The AAMDC appreciates the Government of Alberta’s willingness to share as much information as possible with municipalities related to procedural changes associated with centralization, but this does not address the intent of the resolution. With this in mind, this resolution is assigned a status of Intent Not Met, and the AAMDC will continue to advocate on this issue.
Alberta Municipal Affairs
The centralization of industrial assessment constitutes a significant shift for both the province and municipalities. While it is recognized that implementation will take time, Alberta Municipal Affairs (MA) assumed responsibility for this function in January 2018, in accordance with the Municipal Government Act.
MA will continue to work closely with municipalities and industry to shape this transition, inclusive of maintaining the standing advisory bodies currently in place, and providing regular updates through information bulletins, web-based materials, and participation in municipal forums.
With legislative provisions and regulations now finalized, it is important to note that the valuation standards and other rules for preparing assessments have not changed. Rather, the responsibility for the preparation of industrial assessments will transition from municipalities to the Provincial Assessor. Further, impacts from changes to regulatory definitions are expected to be minimal, as the regulatory review did not result in major policy change.
A hybrid delivery model is being pursued to assist in the broader transition. Within this model, the province will fulfill its responsibility using a combination of qualified in-house and contracted assessors. The province has commenced the process of integrating the assessment function for many of the Designated Industrial (DI) Properties into its direct operation. For other DI Properties, assessment services contracts are being finalized with a selected number of municipalities and are expected to be finalized with other municipalities in the coming months. Additional details regarding municipal responsibilities, reimbursement, and ongoing communication will be contained in these contracts.
MA appreciates the input received from municipalities in relation to the draft list of industrial properties designated as ‘major plants.’ This list has been finalized based on this input and is available in the Machinery and Equipment Minister’s Guidelines.
The centralization of industrial assessment was a significant shift to the Municipal Government Act under the most recent review. This change has the potential to disrupt municipal assessment operations and remove established local knowledge of facilities within municipalities. The resolution requests a delay in the implementation of the centralization until “Ministry personnel can procure the appropriate resources to develop valuation standards, regulated assessment rates, undertake and complete impact studies, communicate and collaborate with municipalities.”
Since Alberta Municipal Affairs assumed their new responsibilities as of January 2018 and there was no delay, this resolution’s intent has not been fulfilled. On January 1, 2018, the Government of Alberta began a phased transition to centralized assessment by providing direct assessment of some designated industrial properties while temporarily contracting municipalities to provide the remaining assessments. In July 2019, the Government of Alberta centralized an additional portion of the remaining contracted assessment work, and transition to a fully centralized system is expected to be complete in 2021.
RMA has engaged in recent discussions with other municipal and industry stakeholder organizations who are dissatisfied with the centralization process. Following the completion of the assessment model review, there may be an opportunity to engage the Government of Alberta in re-considering centralization and evaluating alternatives such as returning responsibility for industrial assessment to municipal assessors, or in establishing an arms-length assessment body for industrial property assessment. This approach is used for all properties in British Columbia (B.C. Assessment), Ontario (Municipal Property Assessment Corporation), and Saskatchewan (Saskatchewan Assessment Management Agency). A similar approach to industrial property could be considered in Alberta.
This resolution is assigned a status of Intent Not Met.