Forest Fringe

Q. How are municipal and education taxes on forest fringe land determined?
Q. If taxes remain unpaid at the end of the year, can the permit holder still get a permit for the next year?
Q. Can livestock producers holding permits to graze on provincial forest lands be taken to court for taxes due?
Q. What are the specific provisions in legislation relating to the taxation of Ministry of Environment grazing permit holders? Are Ministry of Environment grazing permit holders required to be assessed and taxed?
Q. Were provisions in municipal legislation relating to the taxation of grazing permit holders changed in the mid-1990's?
Q. Why do inconsistencies exist in the taxation of grazing permit holders among rural municipalities? What are the differences?
Q. Why are permit holders assessed and taxed for the full year?
Q. In the case of non-payment of taxes by a grazing permit holder, can the tax arrears be charged against any other land owned by that person within the same rural municipality?

A. All Crown lands under lease or permit are currently subject to local government taxation. Vacant Crown lands are not subject to property taxes.

The Saskatchewan Assessment Management Agency (SAMA) prepares property assessments for all properties in the province, except for property in the larger urban centres. Assessed value for regulated property (including agricultural property) is determined by applying the rules and procedures that are contained in the Saskatchewan Assessment Manual, approved by SAMA's Board. See SAMA'S website (below) to access further information about property assessment valuations.

The provincial government groups property into classes and establishes a percentage of value used to determine taxable assessments for each property class. For example, range land within the forest fringe would be valued at 40% of assessed value. These percentages of value allow the government to influence the overall (province-wide) property tax distribution among different classes of property.

The municipality and the province or in some cases the separate school board determine the amount of taxes collected by multiplying the taxable value by established mill rates.

Q. If taxes remain unpaid at the end of the year, can the permit holder still get a permit for the next year?
A. The Ministry of Environment does not require proof of payment of the previous year’s property taxes before issuing a new permit. Where taxes remain unpaid, permit holders may still get a permit for the next year.

Q. Can livestock producers holding permits to graze on provincial forest lands be taken to court for taxes due?
A. Yes, although it has not been used very often in the past for the collection of property taxes, rural municipalities may sue for taxes (Section 320 of the MA) or collect taxes through distress (seizure and sale of goods under Section 323 of the MA).

Q. What are the specific provisions in legislation relating to the taxation of the Ministry of Environment grazing permit holders? Are Ministry of Environment grazing permit holders required to be assessed and taxed?
A. Clauses 292(1)(a) and 300(1)(b) of the MA address this topic:

Exemptions from taxation
292(1) The following are exempt from taxation in all municipalities:  the interest of the Crown in any property, including property held by any person in trust for the Crown;

Changes to taxable status
300(1)(b) An exempt property or part of an exempt property becomes taxable if: the occupant of the property changes and the new occupant does not qualify for the exemption.

Accordingly, the legislation requires permit holders for grazing, hay or fur farming to be assessed and taxed. In practical application, however, not all permit holders or other occupiers of tax exempt land are assessed and taxed. Some municipalities, it seems, find tracking information related to grazing permits more frustrating than the relatively few tax revenues they generate are worth.

Q. Were provisions in the municipal legislation relating to the taxation of grazing permit holders changed in the mid-1990's?
A. No specific legislative changes with regard to the taxation of Ministry of Environment grazing permit holders were made in the mid-1990's. Saskatchewan Environment, however, adopted its policy to deny permit renewals where taxes from the previous year remained unpaid in the mid-1990's. This policy has since been repealed based on an opinion from the Provincial Ombudsman's Office that this practice was outside the Ministry of Environment's mandate.

The 1997 reassessment, which brought assessed values up-to-date after thirty years, may have had an impact on the taxable values calculated for permit holders.

The former Rural Municipalities Act (pre-1989) had the same provisions relating to grazing permits (and haying, fur farming and timber permits) as found in The Rural Municipality Act, 1989. However, provincial forests were excluded from the boundaries of rural municipalities at that time and thus grazing permits issued in the forest fringe were not subject to assessment and taxation. The Rural Municipality Act, 1989 and subsequently The Municipalities Act brought provincial forests within rural municipal boundaries and under their assessment and taxation jurisdiction.

Q. Why do inconsistencies exist in the taxation of grazing permit holders among rural municipalities? What are the differences?
A. It is up to the local municipal assessor/administrator and SAMA to ensure permit holders are assessed properly, as required in the MA.

Any differences in taxation that do not rely on property assessment values are not authorized in legislation. For example, if a municipality used solely the number of cattle in applying taxes to a permit holder, there is no legislative backing. However, it should be noted that SAMA uses a pasture's ability to graze livestock (carrying capacity) as part of its calculation of the assessed value of the land.

Q. Why are permit holders assessed and taxed for the full year?
A. Property assessments take into account the productive potential use of the land (e.g. the number of cattle a pasture is capable of grazing), but are not prorated for the term of the permit (e.g. even if a permit is for one month, the property assessment reflects the same land value as it would for a full year). The assessment methodology does not take into account the time the person has access to the property when determining the land's productive capacity.

Assessments for all property types are for the entire year. Since permits are assessed for the whole year, local councils could abate a portion of the municipal and school taxes for the remaining part of the year that the agreement does not apply, if they deem it appropriate. Section 274 of the MA reads, in part:

Cancellation, reduction, refund or deferral of taxes

274(1) If a council considers it equitable to do so, it may, generally or with respect to a particular taxable property … do one or more of the following, with or without conditions:
(b) cancel or refund all or part of a tax;

(2) If a council takes any action pursuant to subsection (1), the council may also act in the same manner with respect to the claim of any other taxing authority on whose behalf the municipality levies taxes if:
(b) a lease, licence, permit or contract has expired or been terminated with respect to property that is exempt from taxation;

Q. In the case of non-payment of taxes by a grazing permit holder, can the tax arrears be charged against any other land owned by that person within the same rural municipality?
A. There is no legislated authority to transfer taxes of any type from one assessment roll listing/property to another. Regular property taxes are charged against the land, and stay with the land, regardless of ownership. Permit holder taxes would be due from the person, similar to the way business taxes were due in the past.