Resolutions Database

Resolution ID
Amendments to Section 348 of the Municipal Government Act
Vote Required
Municipal Governance and Finances
Requires Endorsement
Majority Needed
Three - Fifths (3 / 5)
Current Status
Sent To Government
Vote Results
Sponsor List
  • County of Two Hills

WHEREAS Section 348 of the Municipal Government Act (MGA) states:

Taxes due to a municipality

  • are an amount owing to the municipality,
  • are recoverable as a debt to the municipality,
  • take priority over the claims of every person except the Crown; and

WHEREAS Section 284(1)(f) defines Crown as:

“Crown” means the Crown in right of Alberta, and includes a Provincial agency as defined in the Financial Administration Act and an agent of the Crown in right of Alberta; and

WHEREAS the Agricultural Financial Services Corporation (AFSC) falls under the definition of Crown; and

WHEREAS in instances, the Crown may take priority over claims of every person; and WHEREAS the AFSC has asserted that as a Crown corporation, they take precedence over municipalities in the recovery of taxes according to Section 348 of the MGA; and

WHEREAS Section 348 of the MGA has the potential to seriously impede municipality’s ability to collect unpaid taxes; and

WHEREAS AFSC is a lending institution and has the ability to do their due diligence, therefore all risk should be burdened by all provincial taxpayers not just a municipality;

Operative Clause

THEREFORE, BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties request that the Government of Alberta amend Section 348 of the Municipal Government Act to reflect that no Crown lending institutions be allowed to take priority over any claims due to the municipality.

Member Background

An entity in the County of Two Hills is in receivership and the corporations that initiated the receivership include Agricultural Financial Services Corporation (AFSC).  The entity was sold in the receivership.  AFSC had loaned this entity more money than was received in the sale.  The sale proceeds are enough to pay the outstanding municipal taxes (which are over one million dollars) with a small amount left over.  AFSC has taken the position that under Section 348 of the MGA, it is entitled to recover its secured claim before the municipality.  The effect of this position has the potential to wipe out any recovery for the municipality.

 The County is concerned about the position being taken here and question if this position is going to be taken in other receiverships going forward.  It has the potential to seriously impede a municipality’s ability to collect unpaid taxes which is becoming a significant issue in Alberta.  It is understood that risk needs to be shared amongst taxpayers, but in this case, the burden will be borne disproportionately by the municipal residents because the municipality has no choice but to provide municipal services to its residents and businesses.  AFSC on the other hand has the ability to do due diligence and chose to make loans.

AAMDC Background

The AAMDC has no active resolutions directly related to this issue.

Government Response
Federal Ministries and Bodies
  • Municipal Affairs
Provincial Boards and Organizations