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of Alberta

Resolution 6-13F

Taxation of Farmed Land Zoned Heavy Industrial

October 8, 2013
Expiry Date:
December 1, 2016
Active Status:
Sturgeon County
3 - Pembina River
Municipal Governance and Finances
Vote Results:

WHEREAS land zoning was changed from agriculture to heavy industrial to enable construction of industrial projects; and

WHEREAS lands were purchased with the intention of constructing industrial projects; and

WHEREAS development has not taken place and lands are farmed and therefore must be assessed as “farm land” and

WHEREAS there is a large difference in assessed value of industrial property in comparison with “farm land”;

Operative Clause:

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties urge the Government of Alberta to amend the Municipal Government Act, Section 297, to allow a council to divide class 3 (farm land) into sub-classes. 

Member Background:

Sturgeon County Council proposes the creation of an assessment sub-class for vacant or undeveloped but rezoned heavy industrial lands that would see industrial landowners pay taxes at least equal to the value of lands at the time of purchase”.

If land is farmed, no matter the zoning, it must be assessed as farm land as defined in the Municipal Government Act (MGA) Section 297 and Matters Relating to Assessment and Taxation Regulation (MRAT).    

Farm land is not assessed using market value but instead its productivity rating based on its agricultural use value as stated in MRAT Section 4(1).  In the Farm Land Assessment Minister’s Guidelines Schedule A, the maximum assessment is established at $350 per acre on Dry Land Farm Land.

MGA Section 297 identifies the various assessment classes as: 

(a)class 1:  residential

(b)class 2:  non-residential

(c)class 3:  farm land

(d)class 4:  machinery and equipment

Municipalities may set a different tax rate for Farm Land compared to other classes of assessment as allowed by MGA Section 354(1)(3). This tax rate applies to all farm land, regardless of ownership, zoning, or market value.

Conversely, Class-1 (residential) property can be split into sub-classes as stated in MGA Section 297(2) (eg: vacant; occupied; etc.).   No such sub-class provision is made for Class-3 (farm land).

This resolution seeks to provide for establishment of sub-classes for lands that are farmed but zoned as Heavy Industrial and whose ownership is corporate/industrial.  In this manner, the ability to establish sub-classes would not put undue economic pressure on agricultural operations and better reflect the value of heavy industrial zoned lands held by industry. 

Policy and Legislative References:

Municipal Government Act (MGA) Section 297(4)(a) “farm land” means land used for farming operations as defined in the “regulations”.  

The “regulation” referred to is the Matters Relating to Assessment and Taxation Regulation (MRAT); specifically Section 1(i) “farming operations” means the raising, production and sale of agricultural products and includes (i) horticulture, aviculture, apiculture and aquaculture, (ii) the production of livestock as defined in the Livestock and Livestock Products Act, and (iii) the planting, growing and sale of sod.  

MRAT Section 4(1) “The valuation standard for a parcel of land is (a) market value, or (b) if the parcel is used for farming operations, agricultural use value”.  

In the Farm Land Assessment Minister’s Guidelines Schedule A, the Agricultural Use Value Base Rate is set at $350 per acre for Dry Land Arable or Dry Land Pasture.  These   Agricultural Use Value Base Rates are modified by applying Final Rating Factors contained in Schedule 7 of the 1984 Alberta Assessment Manual and the Assessment Year Modifiers.  Using these rates, factors and modifiers the maximum assessment on Dry Land Farm Land is $350 per acre.

MGA Section 354(1)(3) “The tax rate may be different for each assessment class or sub-class referred to in Section 297”

MGA Section 297(2) “A council may by bylaw 9(a) divide class 1 into sub-classes on any basis it considers appropriate”. 

RMA Background:

6-12F: Creation of a New Property Assessment Class

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties urge the provincial government to amend the Municipal Government Act to:

  • authorize municipalities to assign a new assessment class to be levied on rural small business properties; or
  • expedite the creation of a regulation which would enable municipalities to create sub-classes within the rural non-residential tax category; or
  • create a special category to deal specifically with small businesses; or
  • create additional/unique urban service areas around hamlets within municipalities or any other legislation that would allow a different property assessment class or sub-class for small businesses in the rural areas of a municipality.
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