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Designated Industrial Property Requisition Tax Rate

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Resolution Category: 
Provincial Scope 3
Adopted - Active
Penhold, Town of
Active Clauses: 

IT IS THEREFORE RESOLVED THAT the Alberta Urban Municipalities Association request that the Government of Alberta amend the Municipal Government Act to enable municipalities to cover the value of the requisition as they see fit, rather than requiring them to carry out a prescribed requisition process.

Whereas Clauses: 

WHEREAS the Province of Alberta has taken over responsibility for the assessment of all designated industrial property;

WHEREAS municipalities are required to collect and forward a requisition to the province to cover the cost of the centralized assessment process; and

WHEREAS the administrative cost of tracking, collecting, and forwarding the requisition to the province exceeds the entire value of the requisition in some municipalities.

Resolution Background: 

Alberta Municipal Affairs has taken over the assessment of properties classified as designated industrial property through amendments to the Municipal Government Act. The purpose of this change was to ensure that a consistent and fair assessment be done throughout the Province from one assessing district to another. To cover the cost of the assessment process, the province added Section 359.3 to the Municipal Government Act requiring municipalities to collect a requisition from designated industrial property owners and forward it to the province.

While the centralization of industrial assessment is a good change in general, the requirement for municipalities to track, collect, and forward the requisition to the province is problematic. Given the small number of designated industrial properties in some communities, the administrative cost can be significantly higher than the entire amount collected through the requisition. This is particularly the case in small communities.

The Town of Penhold is to collect $158.00 for 2018 requisition. The time and expense for collection of the requisition over the past year was anticipated to be more than $1,100 to deliver this service. This expense will come down year over year. However, it appears that the cost will always exceed the revenue intake.

The requirement to collect the requisition is inefficient and unnecessary. Municipalities should have the option to provide the province with the value of the requisition through other means. For example, it may be a financially prudent decision to simply pay the province the value of the requisition out of general revenues rather than pay a higher amount to administer the requisition. Section 359 of the Municipal Government Act should be amended to enable greater flexibility for municipalities to determine the best option for covering the cost of designated industrial property assessment.

Government Response: 

Response received from Alberta Municipal Affairs, January 17, 2019:

Under Section 359.3(2) of the Municipal Government Act (MGA), the Minister must set the property tax rate for the Designated Industrial (DI) property tax requisition. This requisition enables government to recover the costs associated with the preparation and defense of DI property assessments.

Alberta Municipal Affairs recognizes that there may be an undue administrative burden associated with administering small requisition amounts. The ministry will explore ways to address the municipal cost associated with administering the DI tax requisition to determine potential solutions that would be compliant within the MGA and meet the intent of the current system.

AUMA Notes: 

AUMA ran digests articles in May and June, asking municipalities to let AUMA know if they have any concerns with the costs of DI property tax requisition.  To date no municipalities have responded.