Matters Relating to Regulated Industrial Assessment Regulation

(no amdt) ALBERTA REGULATION 174/2026 Municipal Government Act MATTERS RELATING TO REGULATED INDUSTRIAL ASSESSMENT REGULATION Table of Contents 1 Definitions 2 Interpretation provisions for Parts 9 to 12 of the Act 3 Deeming order 4 Application 5 Valuation standard for railway property 6 Valuation standard for linear property other than railway property 7 Valuation standard for machinery and equipment 8 Valuation standard for designated industrial property — land and buildings 9 Determining included costs 10 Excluded costs 11 Previous included costs 12 Penalties 13 Coming into force Schedule Definitions 1 In this Regulation, (a) “Act” means the Municipal Government Act ; (b) “commissioning” means the systematic process of verifying and documenting that an improvement has been installed and tested to operate safely to achieve its intended design and operational requirements; (c) “construction costs” means, in respect of the construction of an improvement, the sum of the direct costs and indirect costs, as determined by an assessor; (d) “contractor” means a person designated by contract as responsible for the construction of an improvement; (e) “direct costs” means any and all actual or attributed costs incurred by an assessed person or otherwise that are directly related to the construction of an improvement, including (i) staffing costs, including labour, supervision, monitoring, inspection, janitorial and security, (ii) materials used for construction and installation, (iii) consulting fees, (iv) land, facility and site surveys, (v) engineering and design, (vi) the costs of the use of construction vehicles and equipment, including cranes, concrete placement equipment, excavators, graders, pumps, scaffolding, tools, yard lighting and other vehicles and equipment typically used for construction, (vii) monitoring and control of construction, (viii) transportation of raw materials or components to the construction site, (ix) handling and storage of materials and equipment, (x) equipment maintenance, repairs and winterization, (xi) temporary administrative and support buildings, (xii) clean-up costs, including (A) on‑site labour for housekeeping, debris clearing and post‑task clean‑up, (B) waste bins, skips, hauling and landfill and recycling fees, (C) equipment used for clean‑up, including loaders, forklifts, sweepers and vacuum trucks, (D) consumables and supplies, including garbage bags, spill kits, absorbents and disposable personal protective equipment, (E) third‑party services for specialized waste removal, including removal of hazardous waste, scrap metal and contaminated material, and (F) final site clean‑up required before an inspection, commissioning or turnover, (xiii) security systems used to provide protection and prevent trespass, theft and damage at the construction site, (xiv) fire protection at the construction site, and (xv) temporary utilities, infrastructure, services and support facilities that support personnel and facilitate on-site work during construction; (f) “included costs” means the included costs as determined by an assessor in accordance with section 9; (g) “indirect costs” means any and all actual or attributed costs that are incidental to the construction of an improvement, incurred in support of the construction or reasonably related to the construction, including (i) contractor profit, (ii) contractor overhead, including administration costs and overhead costs spread across projects, including executive salaries, accounting payroll costs, human resources costs and information and technology costs, (iii) staff recruitment, (iv) permits, (v) insurance, and (vi) costs to obtain a performance bond; (h) “Minister’s Guidelines” means the Minister’s Guidelines established by the Minister, including the following: (i) Alberta Linear Property Assessment Minister’s Guidelines; (ii) Alberta Machinery and Equipment Assessment Minister’s Guidelines; (iii) Alberta Railway Property Assessment Minister’s Guidelines; (i) “post‑construction activities” means activities that occur in relation to an improvement after the substantial completion of the improvement, such as commissioning and start‑up testing, that do not result in additional construction, installation or enhancement of the improvement; (j) “pre‑construction activities” means studies to evaluate the technical, economic and environmental viability of a proposed project; (k) “start‑up testing” means an initial production test at a facility. Interpretation provisions for Parts 9 to 12 of the Act 2 (1) For the purposes of Parts 9 to 12 of the Act and this Regulation, (a) “computing equipment” means the following: (i) tangible personal property used to process, store or transmit digital information; (ii) tangible personal property whose use is ancillary to the tangible personal property described in subclause (i), including (A) racks, cabinets, trays, chassis and internal cables or hoses integral to the operation of the property, (B) rack‑level power distribution and cooling components, including power distribution units, cold plates, in‑rack manifolds, rear‑door heat exchangers, immersion tanks and associated dielectric fluids, and (C) networking equipment, including network switches, routers and optical interconnects; (iii) embedded software and firmware that is essential to the use of the tangible personal property described in subclauses (i) and (ii); (b) “data centre” means a facility in Alberta, the purpose of which is to house and operate computing equipment for applications, including data hosting and cloud computing, digital asset mining, artificial intelligence and machine learning, and digital services and content delivery; (c) “electric distribution system” means (i) a system, works, plant, equipment or service for the delivery, distribution or furnishing, directly to consumers, of electric energy for which rates are regulated by the Alberta Utilities Commission, or (ii) a system, works, plant, equipment or service for the delivery, distribution or furnishing, directly to consumers, of electric energy by a rural electrification association under the Rural Utilities Act or by a municipality, but does not include land, buildings or an electric generation system or an electric transmission system; (d) “electric generation system” means a system used or intended to be used for the generation and gathering of electric energy from any source, including all machinery, installations, materials, devices, fittings, apparatus, appliances and equipment that form part of the system, but subject to an order under section 3 does not include (i) a system owned or operated by a person generating or proposing to generate electricity solely for the person’s own use, (ii) a micro‑generation generating unit as defined in the Micro‑generation Regulation (AR 27/2008), or (iii) land or buildings; (e) “electric power system” means an electric distribution system, an electric generation system or an electric transmission system; (f) “electric transmission system” means a system or arrangement of lines of wire or other conductors and transformation equipment situated wholly in Alberta whereby electric energy, however produced, for which rates are regulated by the Alberta Utilities Commission, is transmitted in bulk, and includes (i) transmission circuits composed of the conductors that form the minimum set required to transmit electric energy, (ii) insulating and supporting structures, (iii) substations, and (iv) operational and control devices, but does not include land, buildings or an electric distribution system or an electric generation system; (g) “machinery and equipment” means, subject to subsection (3), materials, devices, fittings, installations, appliances, apparatus and tanks, other than tanks used exclusively for storage, including supporting foundations, footings and any other thing prescribed by the Minister that forms an integral part of an operational unit intended for or used in (i) manufacturing, (ii) processing, (iii) the production or transmission by pipeline of natural resources or products or by‑products of that production, but not including pipeline as defined in clause (i), (iv) the excavation or transportation of coal or oil sands as defined in the Oil Sands Conservation Act , (v) a telecommunications system, or (vi) an electric power system, other than a micro‑generation generating unit that is the subject of an order under section 3, whether or not the materials, devices, fittings, installations, appliances, apparatus, tanks, foundations, footings or other things are affixed to land in such a manner that they would be transferred without special mention by a transfer or sale of the land; (h) “operator”, in respect of designated industrial property, means (i) the licensee, as defined in the Oil and Gas Conservation Act , (ii) the licensee, as defined in the Pipeline Act , or (iii) the person who has applied in writing to and been approved by the Minister as the operator, or, where none of subclauses (i), (ii) or (iii) applies, the owner; (i) “pipeline” means any continuous string of pipe, including loops, bypasses, cleanouts, distribution meters, distribution regulators, remote telemetry units, valves, fittings and improvements for the protection of pipelines used or intended for use in gathering, conveying, transporting, distributing or disposal of any substance or combination of substances, but does not include (i) a pipe used or intended for use to convey water, other than in connection with (A) a facility, scheme or other matter authorized under the Oil and Gas Conservation Act or the Oil Sands Conservation Act , or (B) a coal processing plant or other matter authorized under the Coal Conservation Act , (ii) a regulating or metering station or the inlet valve or outlet valve in any processing, refining, manufacturing, marketing, transmission line pumping, heating, treating, separating or storage facility or any installation, material, device, fitting, apparatus, appliance, machinery or equipment between those valves, (iii) a pipe, installation, material, device, fitting, apparatus, appliance, machinery or equipment between valves referred to in subclause (ii), or (iv) land or buildings; (j) “railway property” means (i) the continuous strip of land owned or occupied by a person as a right‑of‑way for trains leading from place to place in Alberta, but does not include (A) land outside the right‑of‑way, or (B) land used by the person for purposes other than the operation of trains, (ii) grading, ballasts or improvements located within or outside a right‑of‑way for trains and used in the operation of trains, and (iii) the improvements that form part of a telecommunications system used or intended for use in the operation of trains, but does not include any part of an amusement railway, heritage railway or urban rail transit system as defined in the Railway (Alberta) Act ; (k) “street lighting systems” includes structures, installations, fittings and equipment used to supply light, but does not include land or buildings; (l) “telecommunications systems” includes (i) a system used or intended to be used for the transmission, emission, reception, switching, compilation or transformation by cable distribution undertakings and telecommunication carriers that are subject to the regulatory authority of the Canadian Radio‑television and Telecommunications Commission or any successor of the Commission, and (ii) the items listed in the Minister’s guidelines under section 322(2) of the Act as components of a system referred to in subclause (i), but does not include a private system to which the public is not intended to have access, a radio communications system intended for direct reception by the public or any land or buildings; (m) “well” includes (i) any pipe in a well that is used or intended for use in (A) obtaining gas or oil, or both, or any other mineral, (B) injecting or disposing of water, steam, salt water, glycol, gas or any other substance to an underground formation, (C) supplying water for injection to an underground formation, or (D) monitoring or observing performance of a pool, aquifer or an oil sands deposit, (ii) well head installations or other improvements, with the exception of machinery and equipment, located at a well site used or intended for use for any of the purposes described in subclause (i) or for the protection of the well head installations, (iii) the land that forms the site of a well used for any of the purposes described in subclause (i) if it is by way of a lease, licence or permit, and (iv) a building at a well site that contains machinery and equipment related to the well. (2) Subsection (1)(c) to (f) do not apply in respect of section 360 of the Act. (3) For the purposes of subsection (1)(g), “machinery and equipment” does not include computing equipment, including computing equipment used in a data centre. (4) Property is to be considered operational (a) in the case of linear property referred to in section 291(2)(a) of the Act (i) that is an electric power system, (A) on the date specified in the energization certificate issued by the Alberta Electric System Operator operating as the Independent System Operator under the Electric Utilities Act , (B) if there is no energization certificate, on the date, as determined by the assessor based on written information from the Alberta Electric System Operator operating as the Independent System Operator under the Electric Utilities Act , on which the system commences operating, or (C) if there is no energization certificate and the written information referred to in paragraph (B) is unavailable, on the date, as determined by the assessor based on written information from the operator of the system, on which the system commences operating, (ii) that is a pipeline, (A) on the date on which the pipeline is placed in service, as confirmed in writing by the Alberta Energy Regulator, (B) if confirmation of the date referred to in paragraph (A) is unavailable from the Alberta Energy Regulator, on the date, according to written information from the Canadian Energy Regulator, on which leave to open the pipeline is granted under the Canadian Energy Regulator Act (Canada), or (C) if confirmation of the date referred to in paragraph (A) is unavailable from the Alberta Energy Regulator and the written information referred to in paragraph (B) is unavailable, on the date, as determined by the assessor based on written information from the operator of the pipeline, on which the pipeline commences operating, (iii) that is a telecommunications system, on the date, as determined by the assessor based on written information from the operator of the system, on which the system commences operating, or (iv) that is a well, (A) on the finished drilling date for the well, according to the records of the Alberta Energy Regulator as confirmed in writing by the Regulator, or (B) if confirmation of the finished drilling date referred to in paragraph (A) is unavailable from the Alberta Energy Regulator, on the finished drilling date for the well, as determined by the assessor based on written information from the operator of the well, (b) in the case of machinery and equipment that (i) is a new improvement referred to in section 291(2)(b) or (d) of the Act, or (ii) is referred to in section 314 of the Act, on the date, as determined by the assessor based on written information from the operator, on which the machinery or equipment commences operating, (c) in the case of a new designated industrial property improvement referred to in section 291(2)(c) or (e) of the Act that is designated as a major plant in the Alberta Machinery and Equipment Assessment Minister’s Guidelines, on the date, as determined by the assessor based on written information from the operator, on which the major plant commences operating, or (d) in the case of new designated industrial property referred to in section 314.1 of the Act, other than linear property referred to in clause (a), on the date, as determined by the assessor based on written information from the operator, on which the designated industrial property commences operating. Deeming order 3 The Minister may, by order, direct that a system referred to in section 2(1)(d)(i) or a micro‑generation generating unit referred to in section 2(1)(d)(ii) that is specified in the order is an electric power system for the purposes of the Act. Application 4 This Regulation applies to the preparation of property assessments for (a) designated industrial property, and (b) machinery and equipment that is not designated industrial property. Valuation standard for railway property 5 (1) The valuation standard for railway property is that calculated in accordance with the procedures set out in the Alberta Railway Property Assessment Minister’s Guidelines. (2) In preparing an assessment for railway property, the assessor must follow the procedures referred to in subsection (1). Valuation standard for linear property other than railway property 6 (1) The valuation standard for linear property other than railway property is that calculated in accordance with the procedures set out in the Alberta Linear Property Assessment Minister’s Guidelines. (2) In preparing an assessment for linear property other than railway property, the assessor must follow the procedures referred to in subsection (1). (3) For the purposes of section 298(1)(z) of the Act, an assessment must be prepared for machinery and equipment that is part of linear property as described in section 284(1)(k) of the Act, and the assessment must reflect 100% of its value. Valuation standard for machinery and equipment 7 (1) The valuation standard for machinery and equipment is that calculated in accordance with the procedures set out in the Alberta Machinery and Equipment Assessment Minister’s Guidelines. (2) In preparing an assessment for machinery and equipment that is not part of linear property, the assessor must follow the procedures referred to in subsection (1). (3) For the purposes of section 298(1)(z) of the Act, an assessment must be prepared for machinery and equipment that is not part of linear property as described in section 284(1)(k) of the Act, and the assessment must reflect 77% of its value. Valuation standard for designated industrial property — land and buildings 8 (1) The valuation standard for land and buildings that are part of any designated industrial property referred to in section 284(1)(f.01)(iv) or (v) of the Act is that calculated in accordance with the procedures set out in the Alberta Machinery and Equipment Assessment Minister’s Guidelines. (2) In preparing an assessment for land and buildings referred to in subsection (1), the assessor must follow the procedures referred to in subsection (1). Determining included costs 9 (1) Subject to subsection (3), an assessor shall determine the included costs of an improvement that is linear property or machinery and equipment using the following formula: cc – ec = ic where cc is the construction costs; ec is the excluded costs in accordance with section 10; ic is the included costs. (2) For the purposes of subsection (1), the assessor may use the following information to determine the construction costs and excluded costs: (a) information reported by the assessed person; (b) other sources of information that the assessor considers relevant. (3) The assessor shall adjust the included costs of an improvement in accordance with the regional labour factor, if any, set out in the applicable Minister’s Guidelines. Excluded costs 10 (1) For the purposes of determining the included costs under section 9(1), the following are excluded costs: (a) costs of pre-construction activities; (b) costs of post‑construction activities; (c) costs related to spare equipment or machinery that is not being used for the construction of an improvement; (d) costs for mobile equipment; (e) construction costs incurred for an alteration or modification made to an improvement during or after commissioning, including changes to address capacity limitations or improve operational efficiency, where no new improvement is installed as a part of the alteration or modification; (f) costs to access and use intangible property, including royalties, licence fees and patent fees; (g) taxes, including sales tax, property tax and business tax; (h) duty and broker fees levied on imported raw materials, components, equipment or machinery that increase their costs above the costs of comparable raw materials, components, equipment or machinery made in Canada; (i) financing‑related costs, including interest on capital borrowed for the construction; (j) bonuses related to contractor performance, including bonuses paid to a contractor for completion of contractual milestones prior to a stipulated deadline; (k) costs related to financing operations from shareholder equity; (l) costs of computer hardware and software that is used (i) for accounting, (ii) for engineering and design, (iii) to issue permits, or (iv) to prepare financial documents; (m) labour, transportation and other costs related to staff travel to and from the construction site; (n) costs of transporting raw materials or components from within 50 km of the municipal boundaries of the City of Edmonton to the construction site, whether or not the point of origin of the raw materials or components is within 50 km of the municipal boundaries of the City of Edmonton; (o) costs of transporting raw materials or components from a point of origin more than 50 km outside the municipal boundaries of the City of Edmonton to the construction site that exceed the costs to transport the raw materials or components from the point of origin to a location within 50 km of the municipal boundaries of the City of Edmonton; (p) the portion of all labour costs paid as an overtime premium in excess of standard wages; (q) extraordinary site‑specific costs incurred as a result of external events beyond the reasonable control of the contractor or assessed person that delay the construction, such as natural disasters, government‑ordered work stoppages or similar events, but only where the costs are not directly related to construction and only to the extent that the costs are directly quantified; (r) site-specific costs incurred before or during commissioning to address the repair or replacement of a previously installed material, component, equipment or machinery that was damaged or impaired, but only to the extent that the costs are directly quantified; (s) costs incurred to provide temporary protective measures intended to maintain uninterrupted operation and structural safety of existing improvements during construction that is in close proximity to the active or existing operations or improvements, including additional labour and temporary materials. (2) Notwithstanding subsection (1), the following are not excluded costs: (a) costs incurred or attributed during pre‑construction activities relating to the development of working models used to facilitate or support construction, such as (i) costs related to the development of the design of an improvement that was constructed, and (ii) costs of staff training; (b) costs to complete or add an improvement during or as a result of post‑construction activities; (c) costs associated with constructing a new improvement around an existing improvement; (d) costs to ensure (i) the continuity of operations, (ii) safety requirements continue to be met, or (iii) a facility complies with relevant building codes and other regulatory requirements; (e) costs to begin the construction of an improvement that is intended for use for a future expansion or improvement; (f) costs related to the access and use of computer hardware and software that is necessary and integral to the operation of an improvement and without which the improvement cannot reasonably function as intended; (g) costs related to engineering, design, materials or components that exceed the standard functional requirements or regulatory minimums necessary to operate an improvement. Previous included costs 11 (1) This Regulation applies to the calculation of the included costs of linear property or machinery and equipment where the first determination of the included costs is for 2027 or a subsequent taxation year. (2) If the included costs of linear property or machinery and equipment were first determined for 2026 or an earlier taxation year, those included costs continue to apply in respect of the linear property or machinery and equipment. (3) Where a facility is comprised of more than one linear property, machinery and equipment or both and a linear property or machinery and equipment is removed from the facility, the included costs to be deducted from the assessment of the facility are the included costs of the linear property or machinery and equipment calculated in accordance with section 9 or subsection (2), as the case may be. Penalties 12 (1) A notice of administrative penalty under section 295(1.1) of the Act must include the following information: (a) the name of the person liable to pay the administrative penalty; (b) the particulars of the contravention; (c) the amount of the administrative penalty, in accordance with the Schedule; (d) the timeline within which the administrative penalty must be paid; (e) the methods by which the administrative penalty may be paid. (2) A notice of administrative penalty issued by the Minister must be issued no later than February 28 of the taxation year following the taxation year for which the information was required. (3) A notice of administrative penalty must be served on the person subject to the administrative penalty. (4) A person who is served with a notice of administrative penalty must pay to the Crown the amount of the penalty within 60 days of the date of service of the notice. (5) A person who is served a notice of administrative penalty may apply to the Court of King’s Bench for judicial review of the administrative penalty no later than 60 days after the date the notice is served. (6) Subject to a judicial review under subsection (5), if a person fails to pay an administrative penalty in accordance with a notice of administrative penalty and this Regulation, the Minister may file a copy of the notice of administrative penalty with the clerk of the Court of King’s Bench and, on being filed, the notice has the same force and effect and may be enforced as if it were a judgment of the Court. (7) If the Minister is of the opinion that it would be appropriate to do so, the Minister may amend, correct or cancel a notice of administrative penalty issued under this section. Coming into force 13 This Regulation comes into force on January 1, 2027. Schedule Penalties for Non-compliance 1 The penalties for failure to comply with section 295(1) of the Act are as follows: (a) Linear property — except electric generation systems Up to $50 per day after 60 days from the date of the request to a maximum of $1000 (b) Land and improvements regulated by Alberta Energy Regulator, Alberta Utilities Commission or Canadian Energy Regulator Up to $50 per day after 60 days from the date of the request to a maximum of $1000 (c) Designated industrial property — major plants and electric generation systems, including land and improvements Up to $500 per day after 60 days from the date of the request to a maximum of $10 000