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M.D. gets update on progress of its tax-recovery lands

Posted on August 8, 2019 by Vauxhall Advance

By Cole Parkinson
Vauxhall Advance

Municipal District of Taber councillors have started to prioritize how they wanted to move forward with their amble amount of lands in their possession.

At their most recent policy meeting, councillors were brought up to date on some history of how some of the lands were brought back into the M.D. fold and what the future may hold.

“I’ve had lots of discussions over the past year and a half or two years about what we have and what we do with it,” said Brian Peers, director of municipal lands and leases.
One of the lands discussed was tax recovery lands.

Tax recovery lands are properties that were once privately owned but were forfeited to municipalities due to unpaid taxes during the depression when drought, low prices and poor farming practices forced many off.

Between 1954 to 1996, 144 quarter sections (23,000 acres) of land was acquired by the M.D. of Taber through tax recovery proceedings.

Due to the pace at which the M.D. acquired these surrendered lands, they were unable to administer the lands and the M.D. entrusted tens of thousands of aces to the province.
Back in July 2006, the M.D. made a formal request to the provincial government to have all tax recovery lands transferred back.

“Our initial letter went out in 1996,” added former CAO Derrick Krizsan.

From this, the M.D. had 58,340 acres transferred back between 2009 and 2017, though the province has retained 20,762 acres deemed to be environmentally sensitive.
“Those are the lands that we have up in the Retlaw area for the most part. Some of them are tame grass, some are cultivated and some are still native. They are smaller parcels, one, two or three quarters,” explained Peers.

As far as the lands still held by the province, the environmentally sensitive designation was due to wildlife.

“Primarily, there were some historical areas known for wildlife sensitivity as far as antelope,” stated Peers.

The tax recovery land given back to the M.D. was then administered through M.D. of Taber grazing and cultivation leases.

“From that 23,000 acres or so that we had prior to those larger transfers, it is broken into land type,” added Peers.

Historical tax recovery land is split into native grass (14,200 acres), tame grass (2,904 acres), dryland cultivation (5,973 acres) and irrigated cultivation (145 acres) which totals to 23,122 acres.

Recent tax recovery land administered through M.D. tax recovery is split into native grass (54,957 acres) and tame grass (3,383 acres) for a total of 58,340 acres.
Total inventory of M.D. owned lands is 81,462 acres and there are 105 total agricultural leases.

“It is still primarily native grass and some dryland cultivation, which we currently still own,” said Peers. “Vauxhall grazing is the largest leaseholder at 21,000 acres, slightly more than that actually.”

When looking at leases in the M.D. they have administered them through three different methods — tax recovery grazing leases (58,340 acres), M.D. of Taber grazing leases (17,004 acres) and M.D. of Taber cultivation leases (6,118 acres).

Tax recovery grazing leases have 10-year terms expiring on February 28, 2026, M.D. grazing leases have 10-year terms expiring on February 28, 2027 and M.D. cultivation leases have four-year terms expiring on February 28, 2021.

One question council brought up was around the tax recovery lease which states ‘leaseholder provided an option to purchase lease lands once all tax recovery lands have been transferred to the M.D.’

“That is one of the schedules within the tax recovery lease and it has been there since the start. One could argue we haven’t received all of our lands because we are still waiting for those other 20,000 acres of environmentally sensitive lands. In my time, we haven’t had any request to purchase,” replied Peers, who also touched on the M.D. grazing leases. “The big difference on this one versus the tax recovery lease is it currently states the leaseholder will receive up to a maximum of a half of it back from the oil and gas.”

The lease also states ‘tax recovery lands sold subject to registration of a restricted covenant prohibiting breaking of native grass.’

Rent is established at 19 per cent of agricultural use assessment (2018) with an average at $34/acre, 20 per cent (2019) $36/acre and 22 per cent (2020) $39/acre.

Revenue sees grazing leases (79,148 acres) pull in $55,404, dryland cultivation lease (5,873 acres) at $213,519, irrigated cultivation leases (145 acres) are $11,745, oil and gas surface revenue at00 $1,457,270 for a total of $1,737,937.

Annual oil and gas rent returned to leaseholders through tax recovery leases is $164,000, M.D. grazing leases is $3,001 and M.D. cultivation leases is $38,214 for a total of $204,215.

While oil and gas has taken a steep decline in recent years, the M.D. still has a fair amount of leases.

In total there are 557 leases, 28 operators with 314 CNRL leases (56 per cent) and 126 SanLing leases (23 per cent) which equals out to $1,457,270 in total surface lease revenue.

There are 3,427 active wells, 3,899 reclaimed wells, 2,119 suspended wells and 3,421 abandoned wells while there have been an estimated 300 wells assigned in the Orphan Well Association with the M.D.

Both CNRL and SanLing Energy still have major operations in the area as CNRL accounts for around 45 per cent of all wells in the M.D. while SanLing Energy has 677 wells with 276 active and zero reclaimed.

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