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.
Identifying designated industrial properties -- definition
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
Request for Information (RFI)
Municipal data acquisition
Major Plants list
Contact CIPA team
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 will send the designated industrial property tax rate to municipalities 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.
Linear property is now under Designated Industrial Property. In March 2018, municipalities will receive a requisition levy from the Minister of Municipal Affairs. The levy 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 levy 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 firstname.lastname@example.org.
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. Starting in 2018 assessment year 2019 tax year, the Linear Property Assessment Minister’s Guidelines will be used to create the property assessment for railway.
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.
To ease the transition, the provincial assessor (PA) will prepare assessment of designated industrial properties using a phased approach. To help with the transition, Municipal Affairs will be partnering with some municipalities to provide the assessment preparation for properties using a hybrid assessment delivery model. This will be a contractual arrangement between Municipal Affairs and the respective municipalities, in which the municipality will continue to provide assessment services under the guidance and direction of the PA during the transition period. Details on how this will roll out will come soon.
On June 30, 2017 Municipal Affairs sent a letter to municipalities to gauge their willingness to participate in this interim model. Many have expressed interest.
Hybrid Assessment Delivery Model (FAQ)
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 will provide direct assessment of some of the designated industrial properties while others will be provided by contracted municipalities under the direction of the provincial assessor.
Is it possible to delay centralization for another year?
No. The government is committed to the timelines for centralization. The office of the provincial assessor has been created; data for designated industrial properties is being acquired from municipalities; recruitment to increase people capacity for centralization is ongoing; and starting January 1, 2018, the Province will assume responsibility for the assessment of DI properties.
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 is the definition of designated industrial property?
Under Section 284(1) (f.01)(vi) of the MMGA, “Designated Industrial Property” (DI Property), includes:
- Property regulated by the Alberta Energy Regulator (AER), National Energy Board (NEB), Alberta Utilities Commission (AUC).
- Linear property (wells, pipeline, electric power systems) currently assessed by the province. Note that railway becomes linear on January 1, 2018, for taxation in 2019.
- Property designated as a “major plant” by the regulations (refineries, upgraders, pulp and paper mills) which will be listed in a regulation.
- Land and improvements with respect to untitled leasehold interests or parcels of land containing property regulated by AER, NEB, AUC or is a major plant.
- Machinery and equipment (M&E) on a site not classified as a DI property will continue to be assessed by a municipal assessor.
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 are being developed. 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.
To assist with the transition of assessment for DI properties, a standardized Request for Information (RFI) was mailed to all municipalities on June 30, 2017.
Request for Information (FAQ)
I can’t open the request for information document.
The document is in Microsoft Word and the letter is a pdf. You should be able to open the Word document and insert the municipal logo and make the appropriate changes in dates, contact information, etc. If you cannot open the document, please email email@example.com.
Are we also required to send these letters to all Linear Property owners, i.e., TELUS, Rogers, Shaw, Bell, Fortis, AltaLink, ATCO, etc.?
No. Municipal Affairs will be mailing a request for information to all linear property owners/operators. Municipal assessors are only required as usual to send Request for Information to owners or operators of non-linear property.
Are we required to send this request for information to the railway companies?
Yes for the 2017 assessment year for taxation in 2018 railway is the responsibility of the local assessor and therefore you send the RFI. In 2018, assessment year for taxation 2019 Railway becomes linear property and will be assessed centrally, at that time the provincial assessor will send the RFI on railway property.
Will we be provided the list of facilities within our municipality that are now identified as major plants (now designated industrial property)?
We are consulting with municipalities on the major plants list. The preliminary list of major plants is posted with the Matters Relating to Assessment and Taxation (MRAT) Regulation on the MGA review website: https://mgareview.alberta.ca/wp-content/upLoads/media/MRAT-Preliminary-List-of-Major-Plants.pdf.
Should we send this RFI out to all the companies that we normally send out our RFI’s to?
Are we required to send the whole of our assessment roll, including residential, farmland, non-residential, submitted to the provincial assessor by January 15, 2018?
No. You will only be required to send the provincial assessor the part of the 2017 assessment roll with the designated industrial property assessment for taxation in 2018. The preliminary list (2016 assessment roll) should be sent by December 15 of this year with the finalized numbers (2017 assessessment roll) to the provincial assessor by January 15, 2018.
When does Municipal Affairs need the 2018 tax year assessment identified by?
Municipalities must provide the provincial assessor with the 2018 tax year assessment on identified designated industrial properties no later than January 15, 2018.
Has the physical condition date changed for designated industrial property for the 2017 assessment year?
No. For the 2017 assessment year the condition date is December 31, 2017. Once proclamation of the changes to the MMGA occurs the condition date for the 2018 assessment will be October 31. And this will be the date going forward, as well.
On the bottom of page 2 of the RFI it says that an updated RFI can be submitted. For what time period are updated RFIs accepted?
This is communication between the assessor and the company. If more details are required after receiving the RFI, you can contact the company and determine dates. The more complex the property, the more time required to receive the required information and data to create the assessment. The assessor may use their discretion, but preliminary numbers must be to the provincial assessor by December 15, 2017, and final numbers no later than January 15, 2018.
On page 3, item 2 addresses inventory listed in the guidelines. Does this mean every item in the guidelines should be assessed based on the guidelines? Do we have to flip our inventory from cost to the manual?
No. Your current methodology is acceptable, provided you are following the legislation, regulations, guidelines and any direction provided by the provincial assessor. If any changes to methodology are being considered it will be discussed with stakeholders and then communicated accordingly.
Are we looking at the progressive building & structure because we will be conducting a supplementary assessment on them? Who is defining the progressive status?
If a municipality has a supplementary assessment bylaw, all properties (except for linear in 2017) are subject to supplementary assessment. Progressive status is still the same and is based upon condition of the property as of December 31. There is no change in policy with this RFI.
On page 5, Item 4a – non-assessable costs are varied throughout the province. This process is to provide consistency. Where or who gives us the non-assessable? If the non-assessable is not listed in the CCRG are we to remove it from our data?
Section 298 of the MGA excludes specific property or assets from assessment. The CCRG removes them as excluded cost. You would not remove it from your data; you would note why it is excluded from being assessed.
What does page 6, item 6 mean? Are we going to an income approach? Who determines throughput?
With regulated property, there is no income approach. We have deleted fields where plants are running at a lower capacity than their original capacity or when they are overbuilt, etc. The application of any reduction is done through evidence provided to the assessor and the assessor agreeing to reduce it.
Why are we talking about the AER directive (page 6, item 9) and not bulletin 09-07? Is bulletin 09-07 no longer the go to?
The Alberta Energy Regulator (AER) has a number of documents that are required to be completed when a facility is under its authority. AER 13 is just one type of document. This section provides industry an understanding of what is required for the removal or decrease of an assessment for decommissioning or mothballing, etc. Monitoring of the AER documents will provide the assessor with additional information that will assist in understanding the operation and status of these facilities.
Bulletin 09-07 is a best practice and provides guidance to assist the assessor and property owners.
On page 7, points a-d of the RFI we require consistency. Can Municipal Affairs provide direction?
For Wells that are assessed as linear property, additional depreciation under Schedule D is based on volumetrics. In some cases additional depreciation for wells is based on an AER status such as discontinued. The review of the property would indicate whether a facility is operational, etc. The RFI requests data from the company to provide to the assessor with an understanding how the property is being operated and identify any issues that may impact the assessment. Communication between the assessor and the company is always a priority when completing the RFI to ensure an accurate assessment. The Machinery and Equipment Minister’s Guidelines allow for additional depreciation under schedule D for machinery and equipment as long as acceptable evidence of loss is provided. Additionally, Assessment Bulletin 09-07 (see link below to the location on our website) also provides guidance on this issue for well site equipment.
The RFI does very little to provide uniformity or harmony. It has simplified the process, but may provide for some uncertainty and differing interpretations between assessors and property owners.
Centralization is expected to promote consistency and certainty for industrial taxpayers, while lowering administrative costs for municipalities. The standardized RFI was developed as part of this process. The development of the RFI was a collaborative process and included members of the Technical Advisory Committee (TAC). Although there were differing interpretations and opinions between members on the content, the RFI developed must adhere to the legislation, regulations and government policies. Change is always difficult and there will be some growing pains, but with all parties willing to learn, listen and participate in the changes, consistency and uniformity throughout the province will be achieved.
The Provincial Assessor requires assessment roll data for DI Properties in order to send out assessment notices for DI Properties. To ease the administrative burden on municipalities, we are working collaboratively with our vendors to get this information. This process is working well. For your information, details of the information requested are included in the links below:
The municipal tax and financial systems vendors we have been working with include Diamond, Muniware, and Serenic-Bellamy. They are assisting us to develop a custom export routine that all their clients can use. If you are using one of these vendors, you can wait for that solution. Having the tax system vendors create custom export routines will save a lot of time and hassle. The system vendors will disseminate the complete software modifications to their clients and provide instruction on how to install and run them. For those municipalities that do not use these systems, we will work directly with them or their vendors for a solution.
Municipal Data Acquisition (FAQ)
The provincial assessor (PA) has communicated that the Ministry will be gathering property information through municipal information and taxation companies. Do we still need to provide our assessment roll to the ministry?
The PA will be working with contracted taxation companies to gather necessary information. If you use the vendors that will be under contract, they will develop and distribute a custom data export function and guidance to export selected Roll data in a specific format to Municipal Affairs. But, if your municipality does not utilize these systems, you will still be required to provide your complete assessment roll to the ministry. Municipal Affairs will let municipalities know very shortly which companies are under contract.
Our municipality has very few designated industrial properties (DI Properties). Why is Municipal Affairs requesting our entire assessment roll?
The Ministry is requesting all municipal assessment roll data to ensure accuracy in the development of DI Property data. Please include all assessment roll information. We are requesting a copy of the entire roll so properties believed to be DIPs are flagged. Once this is done we will return it to you to code appropriately in your system. If you have no DI property we will let you know.
How should property ownership data be presented to Municipal Affairs?
Please include all information that you would currently use to complete and mail assessment notices to a property owner in your municipality. This should not be any different than your current process.
Within the new legislation, properties identified as major plants will be listed in a Schedule in the Matters Relating to Assessment and Taxation (MRAT) Regulation. The Assessment Services Branch of Municipal Affairs has drafted an initial inventory of major plants.
Provincial assessment auditors are currently working with assessors to help identify major plants in their municipalities. This information will be used in addition to the consultation process. In addition to the definitions in the legislation, the following criteria can be used for identifying major 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. We’re currently validating the list prior to publishing a final version.
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?
It is expected that grain handling facilities will be 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.
Are sawmills DI property?
A sawmill included on the major plants list will be DI property, however it is expected only the largest sawmills would be considered as a major plant. This is subject to the Minister’s approval.
Are vacant lands owned by Canadian National Railway DI property?
No, however the final decision on this will be made by the Minister.
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 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)