Centralized Industrial Property Assessment
The Modernized Municipal Government Act centralizes property assessment for designated industrial properties under the newly created role of the provincial assessor. Centralization will lead to improved consistency and equity for industrial taxpayers, and lower administrative costs for municipalities. Costs associated with the assessment function will be paid for by industry. The provincial assessor took responsibility for the assessment of these properties on January 1, 2018.
The information provided here will evolve as the Centralized Industrial Property Assessment (CIPA) transition moves forward and therefore will be subject to change.
Designated industrial property tax rate
Combined assessment and tax notices by municipalities
No linear property assessment fees for 2017
Railway for 2018
Updates to start the New Year
Hybrid model overview
Major Plants list
Designated industrial property includes:
- Properties regulated by the Alberta Energy Regulator, National Energy Board, Alberta Utilities Commission.
- Linear property (wells, pipeline, railways, telecommunications and electric power systems) assessed by the province. Note that railway became linear on January 1, 2018.
- Property designated as a “major plant” by the 2017 Alberta Machinery and Equipment Minister’s Guidelines regulation; for example, large refineries, upgraders, pulp and paper mills.
- Land and improvements associated with property regulated by the Alberta Energy Regulator, Alberta Utilities Commission or National Energy Board and major plants.
- Machinery and equipment on a site not classified as a designated industrial property will continue to be assessed by a municipal assessor.
The cost of assessing designated industrial property is recovered through a requisition (MGA s.326(1)(a)(vi), s.359.3) and paid by designated industrial property taxpayers at a rate set by the Minister (MGA s.359.3(2)). The same rate applies for all designated industrial properties and is eligible for cancellation or reduction by the Minister if deemed equitable to do so (MGA s.359.3(3), s.359.4).
In March 2018, the provincial assessor sent municipalities the designated industrial property tax rate with information about the tax requisition process.
For municipalities that issue combined assessment and tax notices, for designated industrial properties, this is a tax notice only. The designated industrial property assessment notices are sent out by the provincial assessor and the complaint dates are on this notice. A comment on the municipality’s combined notices should indicate the designated industrial properties cannot be used to file a complaint.
The provincial assessor annually prepares and sends designated industrial property (DIP) assessment notices to taxpayers (MGA s.308(2)) and publishes a notice in the Alberta Gazette notifying that DIP assessment notices have been sent (MGS s. 311(3)). This combined assessment and tax notice is to be considered a tax notice only.
Linear property is now under Designated Industrial Property. In March 2018, municipalities will receive a requisition from the Minister of Municipal Affairs. The requisition is for the cost of the designated industrial property assessment.
This cost includes what was previously the linear property assessment fee. More information will be coming soon on the Centralized Industrial Property Assessment requisition to be applied to all designated industrial property assessment for 2018 Tax Year.
If you have any questions please contact the Assessment Services Branch toll-free at 310-0000, then 780-422-1377, or by email at email@example.com.
The Municipal Government Act has been under review for the past several years, and amendments came into force on January 1, 2018.
The changes to the Municipal Government Act will see Municipal Affairs -- under the guidance of the provincial assessor – assume responsibility for issuing assessment notices for designated industrial properties, as defined in the act.
One of the specified categories of designated industrial properties is railway.
Municipal Affairs assumed responsibility for the assessment of railway assets currently coded in the ASSET database with actual use codes RR0000, RR0001, and RR0002 on January 1, 2018. These railway assets are those predominantly contained within the rights-of-way. For the 2018 tax year (2017 assessment year), they will be assessed as designated industrial properties.
There is no change to the 2017 assessment year process for railway assets on private property that are currently assessed as part of a larger plant. However, if the railway located on private land has been assessed on a separate account or roll number, the assessor can report the rail only as designated industrial property. If the rail is part of the larger assessment and cannot be separated, the assessor is not required to separate out the rail for the 2018 tax year.
An Order In Council (OIC 443/2017) repealed the Extension of Linear Property Regulation effective January 1 of this year.
First, the instructions of the Extension of Linear Property Regulation are no longer needed, as they have been updated and relocated to the new Matters Relating to Assessment and Taxation Regulation, 2018. Second, the instructions of this regulation and that of the new s.362.1 of the reviewed and updated Municipal Government Act, maintains the status quo for electric power system properties to ensure continued equity of assessment and taxation treatment.
Why can’t Municipal Affairs assess all DI properties directly on January 1, 2018?
Centralization of DI property assessments is a major change and a phased approach is required to ensure the transition is completed successfully.
Starting January 1, 2018, Municipal Affairs began providing direct assessment of some of the designated industrial properties while others will be provided by contracted municipalities under the direction of the provincial assessor.
It seems centralization will reduce property assessment for industrial properties. What is being done to ensure that designated industrial properties are not assessed below their initial assessment value prior to centralization?
Centralization is not intended to increase or decrease assessment. It is intended to provide the right assessment. The aim is to promote consistency and equity in assessment through one centralized function.
If we opt-out of the Interim Hybrid Delivery Model, can we opt-in later?
No, once the provincial assessor assumes responsibility of the assessment function for designated industrial properties, there will be no opportunity to opt back in.
What if I want Municipal Affairs to take over the assessment function now?
If a municipality is not interested in partnering with the provincial assessor under the hybrid delivery model, the provincial assessor will fully assume this function.
What are the details of the contract?
Draft contracts and a compensation package have been sent out. These will form part of contract discussions with municipalities.
How will the compensation be structured in contracts to provide services?
A draft compensation package will be part of the contract discussions with municipalities and should be rolled out in the near future for consideration.
Who will the contracts be with, the municipality or the municipal assessor?
The contracts under the hybrid delivery model will be between the Government of Alberta and the municipality.
The criteria used to determine the major industrial plant for the first year are as follows:
- for oil and gas related plants: 2016 assessment of more than $30,000,000;
- for other types of plants: 2016 assessment of more than $35,000,000 and the 2016 M&E assessment is more than 50% of its total assessment;
- no agriculture related plants, including fertilizer plants.
Major Plants List (FAQ)
Why is the list of major plants not complete?
The preliminary list of major plants was developed using publicly available information and internal knowledge. The list was intended to begin the discussions with stakeholders. And it’s been a good start. We’ve had constructive initial feedback from our stakeholders and have reached back out for more information. With the 2018 Assessment Year, the Provincial Assessor and the local assessor will be working closely to ensure the list is as complete as possible for the current year of the assessment. This list will always be changing from year to year.
I thought the major plants pertained to the oil and gas industry?
The intention is to provide uniform and consistent assessment provisions for large, specialized, and complex facilities. Industries beyond the energy sector have such assets which also will benefit from a centralized approach to valuation.
Are tower sites not CRTC regulated DI property?
Non-linear tower sites are NOT DI property.
Are tower sites CRTC regulated (building/land/fence) DI property?
There is no change in how these properties are assessed. Land, building and fencing will remain the responsibility of the municipality. The tower and equipment are DI property (linear).
Are grain handling facilities DI property?
Grain handling facilities are excluded from the list of major plants.
Are electric sub stations (land/building/fence) DI property?
As electric power facilities are regulated by the Alberta Utilities Commission, all improvements and land directly related or ancillary to the facility on the site are DI property (linear).
Are privately held properties with railway DI property?
The railway inside the right-of-way would be considered Linear property and therefore DI property. For rail outside the right-of-way the trackage is railway, however the land is not included and will be assessed by the municipal assessor. The rail/trackage is linear railway but does not include the parcel that it is located on. The land will remain assessed with the parcel by the local assessor.
Are sawmills DI property?
A large sawmill or paper plant included on the major plants list will be DI property, see above criteria.
Are vacant lands owned by Canadian National Railway DI property?
Are vacant Storage sites owned by Oilfield Operators (e.g. LongRun Exploration) DI property?
If it is a separate legal parcel, not used in the oil/gas process and not regulated by the AER (NEB or AUC) it would not be considered DI property. This, again, is subject to the Minister’s approval.
For Delegated Assessors
Quarterly Reporting Templates
For further information or answers to your questions, please contact:Sheryl Ferguson
Administrative Support, Project Director's Office
Centralized Industrial Property Assessment Unit
Phone: 780-644-4431 (to call toll free, dial 310-0000 first)