Casual legal: Industrial property assessments
DISCLAIMER: This article is meant to provide information only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated.
By Michael E. Swanberg
Reynolds Mirth Richards Farmer LLP
Alberta Municipalities Casual Legal Service Provider
On June 26, 2026, the new Matters Relating to Regulated Industrial Assessment Regulation, Alta Reg 174/2026 (MRRIA) was approved by the Minister of Municipal Affairs. This regulation will come into force on January 1, 2027, and will apply to the 2026 assessment year.
MRRIA changes how new linear property and machinery and equipment assessments are calculated. Currently, these assessments are calculated using the property’s actual construction costs (including both direct and indirect costs), less any costs that are specifically excluded, before other modifiers and depreciation are applied. While MRRIA adopts this same general framework, it provides greater clarity on what “direct” and “indirect” costs are, and what construction costs are excluded from the assessment.
In particular, the previous requirement that “abnormal” construction costs be excluded from assessment has been difficult to apply and has led to significant contested hearings before the Land and Property Rights Tribunal to determine how “normal” and “abnormal” costs are identified.
MRRIA addresses this issue by removing the exclusion of “abnormal costs” and substituting that with an exhaustive list of more clearly defined categories of excluded costs (s. 10(1)), along with a list of costs that are to be included notwithstanding the exhaustive list of excluded costs (s. 10(2)). The purpose is to avoid litigation and increase stability and predictability in the preparation of industrial assessments. These changes will only apply to assessments of new improvements starting in the 2027 taxation year.
MRRIA also adjusts all linear property and machinery and equipment assessments by regional factors that will be determined by the Minister each year (s. 9(3)). This accounts for differences in construction costs between different regions by using an easy-to-apply calculation factor.
MRRIA also specifies how new administrative penalties under s. 295(1.1) of the MGA are to be calculated and applied. Section 295(1.1) allows the Minister to issue an administrative penalty to any person who fails to provide information requested by the Provincial Assessor for the preparation of industrial assessments. Section 12 of MRRIA specifies procedures for issuing these penalties, judicial review processes, and sets maximums for these penalties.
Overall, MRRIA will increase stability and predictability in the preparation of new industrial property assessments. These changes will not necessarily lead to assessments increasing or decreasing – rather, the new methodology will likely have a different impact on different properties. Municipalities should consult with their municipal assessors and the Provincial Assessor if they have questions about how MRRIA might impact the preparation of industrial property assessments within their borders.
To access Alberta Municipalities Casual Legal, Alberta Municipalities members can call toll-free to 1.800.661.7673 or email casuallegal [at] abmunis.ca (casuallegal[at]abmunis[dot]ca) and reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, please contact riskcontrol [at] abmunis.ca (riskcontrol[at]abmunis[dot]ca), or call 310.MUNI (6864) to speak to Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.
