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Overview and purpose:

Assessment Model Reviews started in February 2018 for Wells, Pipelines and Machinery and Equipment (M&E) throughout the province of Alberta (AB). The rates for these regulated property types had not been updated since 2005 and needed to be adjusted to reflect changes in technology and industry practices. The reviews are a follow-up to the modified Municipal Government Act.

Alberta Assessment Services Branch (ASB) engaged their staff and industry representatives for each review. The M&E group included, representatives from the Alberta Assessors Association and Stantec, and Gord Davis of GAP consulting.

Well review:

The Wells Focus Group consisted of industry representatives experienced in assessment and taxation, representing a variety of well types. This included deep horizontal gas wells, conventional oil wells, shallow gas wells (including coalbed methane CBM), and steam-assisted gravity drainage (SAGD) wells.  They presented a “Well Drilling 101” session with ASB and their consultant to demonstrate the impacts of technology and cost efficiencies associated with modern well drilling. Significant time has been invested in meetings, research and presentations over the past two years. Despite these efforts, the current ASB proposal for well assessment has serious flaws, which we will expand on during out working breakfast (details below).

Pipeline review:

The Pipeline Focus Group also included industry representatives, including two large pipeline companies, and one producer. Like the Wells Group, numerous meetings and efforts have been made over the past two years. The current Base cost proposal for pipelines includes a proposed average increase of approximately 32%*. Pipelines between 4” and 10” (majority of producer pipelines) are estimated to increase 90%.  With no impact analysis being provided, there is no understanding of the impact to taxpayers or municipalities. 

*indicates average provided by ASB and has not been confirmed

M&E review:

The focus group for M&E had two main mandates: 

  • The first was to update the manual base Cost rates for light oilfield equipment such as tanks, separators, compressors, and “other”
  • The second was to review prescribed depreciation for all M&E. The M&E group had industry representatives and was unique from the other groups in that it included municipal assessor representatives

After determining the size of the task this group was faced with, ASB created a sub-group that focused exclusively on depreciation.

The current proposal includes an 8% increase in Base Costs for M&E, but this varies widely by property type. There are also proposed changes to modifiers and depreciation, which will result in a large redistribution in assessment and subsequent tax burden. Once again, no impact analysis has been provided by ASB. 

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Shawna Burke-MartinBurke-Martinbu-commercial-property-tax tax-assessment-appealsproperty-tax-management-compliancebrandoncalgary-4th-streetcalgary-7th-avedartmouthedmonton-101-stedmonton-106a-avefort-st-johngrande-prairielloydminsterlondonmariamontrealottawaquebecreginasaskatoonswift-currenttoronto-hqvancouvervirdenweyburnwinnipeg-centurywinnipeg-lombardyorkton

Senior Director, Property Tax

Last updated on November 7th, 2019 at 10:42 am

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