The Alberta Municipal Government Act (MGA) has been amended to expand the information that an assessor can request from taxpayers regarding preparation of assessments. This expanded legislative scope has the potential to also expand the consequences to taxpayers that do not respond in accordance with the legislation, and may be of particular importance to companies in the energy industry seeking to challenge their municipal taxes.
Until this year, subsection 295(1) of the MGA required a person to provide, on request by a property tax assessor, "any information necessary for the assessor to prepare an assessment or determine if property is to be assessed". If a taxpayer failed to comply with such a request within sixty days, subsection 295(4) provides that the person cannot make a complaint about an assessment in the following year.
Pursuant to that previous version of section 295, the Alberta Court of Appeal considered the circumstances where a taxpayer's right of complaint could be lost under subsection 295(4) in Boardwalk REIT LLP v Edmonton (City), 2008 ABCA 220 [Boardwalk]. There, the Court of Appeal held that the remedy of the loss of a taxpayer's right of complaint was "draconian" in nature, stating that it was "the largest possible penalty in a taxation statute", and that subsection 295(4) was not an automatic rigid bar to challenge an assessment. The Court upheld Alberta v Amoco Can Petroleum Co Ltd., 2000 ABCA 252 [Amoco], where the Court of Appeal had held there are several pre-conditions to a finding that a taxpayer failed to comply with a request of an assessor under section 295, including whether a request for information was made, whether that request was made by an assessor, in the proper and in an intelligible form, whether the request was reasonable having regard to all of the circumstances including past practices, information already available to the assessor, and information available to the owner, what if any information was provided by the owner and what was done with that information, whether the information provided by the owner complied with the request, and whether the information was necessary.
In Boardwalk, the Court of Appeal held that "necessary" means information that is "indispensable, not merely expedient, useful or convenient". Further, the information had to be necessary for assessing the subject property itself, not for the purposes of mass appraisal. The Court of Appeal held that where the information requested pursuant to subsection 295(1) of the MGA was not necessary to prepare an assessment of the property that the request for information related to, the consequences of subsection (4) were not warranted. Further, a taxpayer was only required to act reasonably, in providing information that was substantially complete, with only a reasonable amount of work, based on information which the taxpayer has (as compared to information that the taxpayer must create or go out and find), and in consideration of all of the circumstances, including past practice and information already available to the assessor. Further, assessors owed a duty of fairness to taxpayers, and where an assessor did not tell the taxpayer that the answer to the request appeared incomplete, the assessor had violated this duty.
Alberta Courts and Assessment Review Boards have continually upheld and applied Boardwalk, finding that Assessment Review Boards only had the jurisdiction to dismiss a taxpayer's complaint pursuant to subsection 295(4) if the information requested by the assessor is actually "necessary" within the meaning of section 295 of the MGA (assuming all other requirements of the section were also met).
However, as of January 1, 2018, the wording of subsection 295(1) changed. It now states:
"A person must provide, on request by the assessor, any information necessary for the assessor to carry out the duties and responsibilities of an assessor under Parts 9 to 12 and the regulations." [emphasis added].
Arguably the meaning of "necessary" has been expanded, in that information that is "necessary" presumably now means information that is "indispensable, not merely expedient, useful or convenient" to the assessor's performance of its duties and responsibilities as set out in Parts 9 to 12 of the MGA and pursuant to the regulations, and not just in preparing an assessment for the particular property owned by the taxpayer to whom the assessment request for information has been sent.
Parts 9 to 12 of the MGA and the related regulations cover the entire scope of the legislation regarding assessment of property, including preparation of assessments, all manners of municipal taxation, and legislation relating to Assessment Review Boards and Municipal Government Boards in Alberta. The duties and responsibilities of an assessor thereunder include but are not limited to preparing assessments, preparing the assessment roll, and preparing assessment notices. The reference in section 295(1) to Parts 9 to 12 seems overly broad, considering that those Parts cover, among other things, the establishment and function of Assessment Review Boards and of Municipal Government Boards.
Next year, if a taxpayer has failed to respond to an assessment request for information provided to the taxpayer under section 295 of the MGA, the scope of whether that requested information is "necessary" will be significantly expanded. It remains to be seen how Assessment Review Boards and Courts in Alberta will interpret a taxpayer's obligations to provide information in the context of the amended legislation, whether the "draconian" remedy of eliminating a taxpayer's right of complaint will be more readily employed. Arguably, the pre-conditions to a find that a tax payer failed to comply with a request under subsection 295(1) as set out in Amoco will continue to apply, and it will only be if those pre-conditions are met that a remedy under subsection 295(4) can be considered. However, if the pre-conditions are met, and with the expanded meaning as to what is "necessary", applications for the remedy of elimination of taxpayer rights of complaint could be successful more often.
It should also be noted that as of January 1, 2018, section 295 was also amended to add subsection (6), which essentially states (in part) that where an assessment of a property is the subject of a complaint before an Assessment Review Board, then notwithstanding subsection 295(1), the assessed person is not required to provide any information to an assessor regarding that assessment until after the complaint has been heard and decided by the Board. It may be that because of this amendment, municipalities will shift the dates when they issue assessment requests for information, so the deadline to respond to those requests occurs outside of the period in which an assessed person may have a pending complaint before the Board.
To avoid the risk of losing the right to make a complaint about the assessment of a property (and the risk of having to defend an application by an assessor for that relief), it is recommended that taxpayers take the following steps:
- Contact the municipality in which your property is located to endure that it has your correct mailing address and contact information on file. Find out when and how the municipality sends out assessment requests for information (as municipalities throughout Alberta differ on this point. Edmonton requests are usually sent in the fall, for example, whereas Calgary requests are sent in the spring). Check whether any responses to information requests regarding your property are outstanding.
- Keep records of information requests received and responded to.
- If the information requested is confidential, advise the municipality of this. The MGA includes mechanisms to ensure that confidential information remains confidential.
- Respond to information requests even if the response is that there has been no change to the requested information since the previous year. Keep in mind, however, that an assessed person is not obligated to provide information to an assessor where the assessed person has a complaint before the Assessment Review Board regarding the assessment of the property.
- Legal counsel can assist in determining whether information requested by an assessor is "necessary" within the meaning of amended subsection 295(1). While the scope of "necessary" information has been expanded, it is not unlimited.