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FINANCE - Taxation - Non-assessable property

Monday, October 21, 2019 @ 9:51 AM  


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Appeal by the Assessment Management Agency from a decision of the Assessment Appeals Committee determining that certain oil storage tanks and chemical storage tanks owned by the respondent Husky Energy, were resource production equipment associated with non-producing oil wells and therefore not subject to assessment for the 2017 assessment year. Husky owned three properties. In addition to its land, each property consisted of two or more oil and gas buildings as well as items of equipment and storage tanks. The oil tanks stored oil brought to the surface from nearby oil wells and the chemical storage tanks were associated with readying extracted oil for transportation. None of the wells associated with the oil storage tanks on the properties were producing.

HELD: Appeal dismissed. The Committee was correct when it concluded that Husky’s tanks associated with the three properties qualified as resource production equipment. The Committee decision not only comported with the words of the Municipalities Act when they were read in their entire context and in their grammatical and ordinary sense, but this interpretation was consistent with the Legislature’s evident intent and the statutory scheme as a whole. If the words used within the statutory definition of resource production equipment were given their ordinary meaning and read in isolation, Husky’s tanks would qualify as resource production equipment as they met all the criteria for resource production equipment as set out in s. 2(1)(nn). The Act did not direct a particular method of operation of an oil or gas well before an item qualified as resource product equipment. Instead, resource production equipment was identified by its actual use in the operation of the mine or petroleum oil or gas well. The inevitable legislative signal was that a tank used for such purpose was resource production equipment.

Frenchman Butte No. 501 (Rural Municipality) v. Husky Energy Inc., [2019] S.J. No. 352, Saskatchewan Court of Appeal, P.A. Whitmore, J.A. Ryan-Froslie and R. Leurer JJ.A., September 18, 2019. Digest No. TLD-October212019003