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FINANCE - Taxation - Real or immoveable property assessment

Tuesday, September 07, 2021 @ 9:36 AM  

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Appeal by several grain elevator companies from a decision of the Assessment Appeals Committee determining that the grain handling equipment used in the elevators to receive, store and ship grain was machinery and equipment used to service the building or structure and was therefore assessable. The Committee concluded that the equipment necessary to fulfil the purpose or use by reference to which a building was defined must be considered as being used to service the building. The appellants argued that the Assessment Management Agency’s conclusion that the grain handling equipment was used to service the building assessed the enterprise or operating use of the building rather than the building itself. They argued the use or purpose of the building was not relevant for assessment purposes and that the focus must be on whether any machinery and equipment serviced the building.

HELD: Appeal dismissed. The Committee made no error in taking into consideration the purpose of an elevator when determining that the grain handling equipment was an improvement under the Municipal Act and the Cities Act. It properly found that the grain handling equipment was used to service the buildings in issue. The regulatory definition of an elevator as a class required that, to be assessable, the elevator building must operate for the purpose for which it was designed. On this basis, the phrase “used to service the building” as it applied to elevators required an examination of what equipment was required to allow the building to function as an operating elevator. The grain handling equipment required for an elevator to carry out its sole purpose serviced the building within the meaning of s.2(1)(q) of the Act and, as such, was assessable. If the grain handling equipment was to be removed from an elevator, it would cease to be classified as an elevator because, to be an elevator, a building must be used for receiving, processing and shipping grains. The assessed value must include those items that allowed the building to function as a building.

Richardson International Ltd. v. Saskatchewan Assessment Management Agency, [2021] S.J. No. 323, Saskatchewan Court of Appeal, R.G. Richards C.J.S., R.K. Ottenbreit and J.A. Ryan-Froslie JJ.A., July 30, 2021. Digest No. TLD-September62021002