Lawyers for Lethbridge County and a group of southern Alberta feedlot owners made their cases in Alberta Court of Queens Bench Feb. 3 to defend and dispute the validity of a county business tax and special tax levied in 2016.
The bylaws allowing the levies imposed a $3 per animal unit tax on livestock producers in the county and a special land tax of $2 per irrigated acre, slightly less than $1 per dryland acre and 50 cents per grassland acre.
The money generated was earmarked for road and bridge maintenance.
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Five feedlot owners filed suit against the county, and the case of Van Raay Paskal Farms et al v. Lethbridge County proceeded last week before Justice R. A. Jerke.
A decision on the case is pending.
Lawyer Robert McCue argued for the feedlot owners that the county exceeded its jurisdiction by passing two bylaws allowing it to levy the business tax and special tax.
He questioned various aspects of the bylaws’ wording, including use of the word “stores” to refer to livestock and whether the county used 2016 funds, estimated at $2.6 million according to the county newsletter, to improve roads rather than maintain them as the bylaw indicated.
McCue also challenged the validity of the special tax on the basis of who benefits from the road maintenance undertaken. He said only a small percentage of revenues collected from the special tax in 2016 were used on haul roads in the county, so there is a “weak correlation” between the properties that were taxed and the properties that benefitted from the road work.
A special tax has to be levied every year, said McCue, and has to be applicable in that year. The county has said it plans to increase the tax to $4 per animal unit in 2017, with further increases possible in subsequent years.
Circumstances and council members might change in that time, the lawyer said.
“This is a classic general tax,” said McCue, and thus is the “antithesis” of how a special tax should be designed.
Lawyers for the county defended the validity of the business and special tax bylaws as they are now worded.
The outcome of the case is being watched by other Alberta municipalities because it will have implications for their own abilities to tax livestock producers and farmland.
Lethbridge County officials did not return calls by press time to comment.
Brian Walton, chief executive officer for the Alberta Cattle Feeders Association, which has objected to the tax and raised the matter with provincial government officials, said he was hopeful about the outcome.
Litigants in the case include Van Raay Paskal Farms, Grandview Cattle Feeders, John Schooten and Sons Feeders, Thompson Livestock and 6A Cattle Co.
Lethbridge County is home to about 50 percent of confined cattle feeding operations in Canada and county officials have said in the past that additional funds are needed to keep the market access network functioning. That includes maintenance of about 2,900 kilometres of roads and 167 bridges.
The feedlot owner litigants have said they deem the new taxes to be illegal and unfair because they put undue burden them.
