Athabasca (County) v, 2023 ABKB 246

Court of King’s Bench of Alberta Citation: Athabasca (County) v 1753116 Alberta Ltd., 2023 ABKB 246 Date: 20230425 Docket: 2103 13381 Registry: Edmonton Between: Athabasca County Applicant - and - 1753116 Alberta Ltd. and Athabasca Country Local Assessment Review Board Respondents _______________________________________________________ Memorandum of Decision of the Honourable Justice Donald Lee _______________________________________________________ [ 1 ] The Applicant County seeks judicial review of the Athabasca County Local Assessment Review Board (“the Board”) decision in this matter.

The Board takes no position in this matter. The main issue before the Board was whether the subject properties met requirements to be assessed using the “agriculture use” valuation standard instead of the “market value” valuation standard. Between 2013 and 2019, the County taxed the subject properties on the basis that it was a farming operation at the agricultural use value. Even

though there was no change to the properties use as a farm where horses and bison graze, a new county assessor assessed the property for 2020 tax purposes as residential in nature, which meant the Respondent’s taxes would increase. Standard of Review [ 2 ] The standard of review in this Court with respect to this application, is whether the Board’s decision was “reasonable”, consistent with the Vavilov decision, 2019 SCC 65 .

Analysis [ 3 ] The Municipal Government Act (“ MGA” ) and Matters Relating to Assessment and Taxation Regulation 2018 (“ MRAT ”) governs what valuation standard applies to a parcel of land and these subject properties. The valuation standard can either be “market value” or “agricultural use value”. In this respect, section 7(1) of MRAT provides: 7(1) The valuation standard for a parcel of land is (

a) market value, or (

b) if the parcel is used for farming operations, agricultural use value. [ 4 ] By default, the valuation standard for a parcel is market value. However, pursuant to section 7(1)(b), if the parcel is “used for farming operations” the valuation standard is not market value, but rather “agricultural use value”. [ 5 ] The term “farming operations” is defined at s 2(1)(

f) of MRAT : the raising, production and sale of agricultural products and includes (

i) horticulture, aviculture, apiculture and aquaculture, (ii) the raising, production and sale of (

A) horses, cattle, bison, sheep, swine, goats or other livestock, (

B) fur-bearing animals raised in captivity, (

C) domestic cervids within the meaning of the Domestic Cervid Industry Regulation (AR 188/2014 ), or (

D) domestic camelids, (iii) the planting, growing and sale of sod, and (iv) an operation on a parcel of land for which a woodland management plan has been approved by the Woodlot Association of Alberta or a forester registered under the Regulated Forest Management Profession Act for the production of timber primarily marketed as whole logs, seed cones or Christmas trees, but does not include any operation or activity on land that has been stripped for the purposes of, or in a manner that leaves the land more suitable for, future development ; [emphasis added] [ 6 ] However some parcels used for “farming operations” will nevertheless be valued using the “market value” valuation standard, if one of the exceptions set out in MRAT applies. [ 7 ] The exception of particular relevance to this matter is s 7(3)(

b) of MRAT :

(3) Despite subsection (1)(b), the valuation standard for the following property is market value : […] (

b) a parcel of land containing at least one acre but not more than 3 acres that is used but not necessarily occupied for residential purposes OR can be serviced by using water and sewer distribution lines located in land that is adjacent to the parcel ; [emphasis added] [ 8 ] In his written submissions to the Board, the County’s assessor submitted that the Subject Properties’ assessments should be

confirmed, on the basis that: • The Subject Properties were not being used for farming operations and were therefore to be valued using market value. • In the alternative, even if the Board found the Subject Properties were used for farming operations, section 7(3)(

b) applied such that the Subject Properties were to be valued using market value.

The Board’s Written Reasons and Decision [ 9 ] The Board’s written Reasons were: • The County “did not provide enough evidence to convince panel to maintain residential nature of the property”. • The County referenced sections “2(1)f and b” from MRAT but “failed to convince the panel that the sections referenced were applicable for changing the assessment rate.” • The Board determined that “the type of farming that the complainant is performing” conformed, in the Board’s opinion, “to section 2(1)f and 1b of MRAT ” • The Complainant and previous assessor both agreed that “the requirement for the agricultural assessment were met.” • No regulations had been changed to warrant a reassessment. • The Board was of the opinion that the “previous agricultural designation should remain and subsequent assessment as well.” In the Board’s view, the “subdivision was initiated with an agricultural designation”. • The restrictive covenant on title was “only applicable at time of sale and should not be a determinant for assessment pre-sale.” [ 10 ] The reasons in this matter did not address every argument put forward by the County but the Board is not required to do so.

However, in reviewing the Board’s decision, this Court must determine whether the Board meaningfully dealt with the key issues and central arguments raised by the County. [ 11 ] The Board found as a fact that the Complainant’s activities were “farming operations”, and there was sufficient evidence on the Record to support the Board’s finding.

Having reasonably determined this in line with existing case law, the Board was entitled to look to the County to provide a meaningful response, which the Board concluded it did not provide. [ 12 ] However, the Board did not engage with the County’s submissions on section 7(3)(

b) of MRAT . This

section was clearly put forward by the County as an alternative argument even if the Board were to find that the subject properties were being used for “farming operations”. Although the Board found the subject properties were used for “farming operations”, it was still incumbent on the Board to consider if section 7(3)(

b) applied to make market value the applicable valuation standard. While there was some minor discussion on the Record on this point, it is neither possible nor proper to “read between the lines” in the Reasons to deduce a chain of reasoning on this point. Instead, the Board seemingly ignored this issue. [ 13 ] Although the Board noted that the “[restrictive covenant] is only applicable at time of sale and should not be a determinant for assessment pre-sale”, the restrictive covenant was only one component of the County’s argument on section 7(3)(b).

Further, the Board’s conclusion that the restrictive covenant was only applicable at time of sale was not explained further by the Board and is legally incorrect in any event, as the Restrictive Covenant was on title and there was no indication in that document that it was not effective. [ 14 ] The County argued that s. 7(3)(

b) applied because there were other services available on adjacent properties, and the Board did not deal with this argument. [ 15 ] The Board also reasoned that the Respondent and the previous assessor had agreed that the requirements for agricultural use were met, that there were no changes in the regulations to warrant a reassessment, and that the subdivision was initiated with an agricultural designation. However the County was not bound by the previous assessments and previous assessor which did not address the County’s current s. 7(3)(

b) in any event. Conclusion [ 16 ] The County’s application on judicial review for a new hearing in this matter is granted, because of the Board’s failure to specifically and meaningfully deal with whether s. 7(3)(

b) applied to make market value the applicable valuation standard. Heard on the 5 th day of April, 2023. Dated at the City of Edmonton, Alberta this 25 th day of April, 2023.

Donald Lee J.C.K.B.A. Appearances: Michael Swanberg Reynold Mirth Richards and Farmer LLP for the Applicant Kathleen Elhatton-Lake Shores Jardine LLP for the Respondent 1753116 Alberta Ltd.