A final report on grazing leases in Alberta does not include a rent increase but stresses the need for a new relationship between renters and the provincial government.
For leaseholder Tim Andrews, a new relationship is not what he had in mind.
Andrews is a Youngstown, Alta., rancher and member of the Alberta grazing lease association. He said the group has concerns with the report, which goes to the legislature next spring. The report, tabled by MLA Tom Thurber, has been reviewed by the agricultural standing policy committee, cabinet and the government caucus.
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The leaseholders association is holding a convention in January to delve further into the report because it has not finished the fight.
“It’s a valiant attempt by Mr. Thurber and this government to give apparent responsibility to the persons who are managing that ground,” said Andrews, who lives in the Special Areas of southeastern Alberta.
Politicians have assured ranchers in the special areas that the grazing lease review does not apply to them. Andrews doesn’t agree.
“That policy is going to apply here sometime down the road,” he said.
There is a 10-year adjustment period for current leaseholders before some of the changes take effect, said Roger Marvin, of the province’s public lands branch.
Ranchers have several concerns.
The final report said since the government owns the land, it will pay the municipal taxes and take a larger share of resource revenue.
Land within a lease used for new energy development will be removed from the agricultural use designation. Oil companies must obtain government permission to enter the land and the leaseholder must negotiate directly with the company for damages to his improvements or livestock.
Under the present system, companies negotiate with the leaseholder to enter property to build gas lines, roads, storage areas and well sites. The landowner receives an annual negotiated payment for damages and loss of use.
Andrews fears under the proposed system the companies will get whatever they request because oil and gas exploration drives a large part of the provincial economy.
The government proposes it will pay the property taxes and return the money to municipalities as grants in lieu of taxes. Taxes will be included in the rental payment.
Assignment fees were unchanged in the final draft of the report. When a rancher transfers a lease to someone else, the government charges an assignment fee based on the location and land productivity. In many cases the rancher adds a charge to the lease based on improvements made to the land. As the land is improved, its value increases.
There was uncertainty because ranchers use their leases as equity when applying for operating loans. When the interim report suggested changing assignment fees, bankers refused to use a lease as security on a farm loan.
“People were being raked over the coals when they went to renegotiate their loans after selling their calves this fall,” said Andrews. “The banks have said ‘your lease is worth nothing to me. What else do you have for collateral so we can keep your operation rolling?’ “
The final report also leaves questions over access to the land. As it stands, access issues can go to the government which acts as arbitrator. In extreme cases, the lease could be lost.
