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Update on the Provincial Industrial Property Assessment Model Review (AMR)

July 29, 2020

The Assessment Model Review engagement process began in January 2020 and has been jointly led by Municipal Affairs and the Associate Ministry of Energy and Natural Gas. The last of four meetings involving representatives from these ministries, industry, and municipal associations took place in May. The meetings were attended by three AUMA representatives, as well as four RMA representatives. The following industry organizations also participated:

  • Canadian Association of Petroleum Producers (CAPP)
  • Canadian Energy Pipeline Association (CEPA)
  • Explorers and Producers Association of Canada (EPAC)
  • Canadian Property Tax Association (CPTA)

The process was embargoed at the request of the provincial government. All participants agreed to refrain from sharing information or discussions with anyone outside of the direct participants (including members).

According to the provincial government, the aim of the current Assessment Model Review process is to modernize the assessment model for regulated properties for wells and pipelines, and develop options for assessment model changes that take into account current costs, economic circumstances, and industry practices with a view to enhancing industry competitiveness while also ensuring the ongoing viability of municipalities. The assessment model review only included the asset classes for wells and pipelines. The asset classes for machinery and equipment (M&E) are out of scope for this review.

Municipal Affairs developed four scenarios of how the assessment of wells and pipelines could be changed, and then presented these to the working group for feedback. Each of the scenarios proposes to significantly reduce the assessment value of these properties through changes in depreciation rates.

If implemented, each scenario will have far-reaching impacts on municipal tax revenue, primarily for rural municipalities where wells and pipelines represent a large portion of the local assessment.

Urban municipalities would be less directly impacted, but the reduction in rural property assessment would result in urban municipalities becoming responsible for a greater share of provincial education property taxes. Most notably, the proposed changes to the assessment model could have regional impacts and the potential for negative impacts on municipal viability.

Since the conclusion of the meetings, Municipal Affairs staff have been formally briefing government ministers and MLAs on the engagement process. Briefings included the models developed, data, analysis, and stakeholder feedback discussed during working group meetings.

The provincial assessor just advised that the briefing period has concluded and the embargo has been lifted. Municipal Affairs plans to move forward the outcomes of the Assessment Model Review for consideration by decision-makers by the end of August 2020.

AUMA’s Advocacy

From now until the end of August, AUMA, together with RMA, will engage in direct advocacy with the Minister of Municipal Affairs, other relevant ministries (Energy, Economic Development and Trade, etc.), MLAs, and relevant opposition critics. AUMA’s advocacy will be principles-based and solution-oriented. RMA’s advocacy will emphasize the disastrous impacts implementation of any scenario will have on rural municipalities.

Also, representatives of CAPP will be invited to the next AUMA Board meeting to discuss possible solutions that could be mutually beneficial for industry and municipalities. We acknowledge that industry needs support, but on a temporary basis, that incents investment and employment growth. Temporary financial supports that do not change the fundamentals of assessment should be considered.

AUMA will be developing information/communication packages for members on the Assessment Model Review to assist in understanding the impacts and providing tools to use in providing feedback to MLAs and Ministers.

If you have any questions, please contact AUMA’s Advocacy staff at advocacy@auma.ca.