Property Rights

[wbrower]

The Cypress / Medicine Hat P.C. Association, yesterday strongly endorsed a resolution to come before the Provincial PC AGM in Edmonton in May.

This resolution calls on the Government of Alberta to entrench Property Rights in Alberta.

A similar resolution was also passed at the annual meeting of The Alberta Surface Rights Federation. The Western Stock-Growers and Alberta Grazing Leaseholders Association also have like minded resolutions on their books.

Perhaps the subversive suppression of our Property Rights that has dominated Alberta politics since the days of Peter Lougheed and Pierre Elliot Trudeau is starting to come to an end.

While this drive to enshrine Property Rights in Alberta may come a little late for the Landholders in the M.D. of Taber, who’s leased Tax Recovery lands are currently in the process of being seized without compensation, by special interest groups controlling that local MD council. Perhaps the time has come when bureaucrats and politicians had better start showing some respect for property rights or they can face the consequences.

[Horse]

Would you explain to those of us that do not know what is hapening in taber re tax recovery lands.

[wbrower]

Tax recovery lands are lands, most likely old homesteads that were abandoned or taken for non payment of taxes years ago. These lands were administered by the provincial government along with grazing leases until recent times there was a cabinet decision to turn tax recovery land back to the counties and MD when requested by the local government to do so.

Several counties and MD’s have taken back administration of these lands from the province and came to amiable terms with the farmers that had previously leased and integrated these lands in their operations. Most cases I am aware of the Local government sold the land in question to the lessee on terms that were affordable and that did not break the original operator. In this way the local government was able to recover and receive tax monies that had not been paid, and the farmer was able to carry on farming.

In the Taber situation the MD is in the process of selling these parcels of land to the highest bidder. Given the abundance of Oil money kicking around urbane Alberta these days, looking for another fast buck play, this process will most likely break up and destroy the farms that, over the years, have incorporated these lands in their operations for generations. Most of these lands were deserted by the original homesteaders before the 1930’s. Also the carrying capacity of these lands in many cases is around 50 acres per cow calf unit per year.

[Horse]

So is that nesseraly a bad thing if one cant farm without a freebee some where mabey it is time to move on.
mabey if the prov gov was to collect a better oil royaltie there wouldnt be these $1500/ day men around with 100rhs of thousands looking for new toys and places to hide tax money.
I think all gov land should be put up for bid at the end of each 10yr lease and lets all of us compete. If they are truly paying what it is worth then there shouldnt be a problem should there.

[farmers_son]

Horse: I realize you have concerns regarding public land. Myself I personally believe that the government should not be owning farm land. However there was a time in this province when people walked away from the land and someone had to own it if for no other reason than to keep if from being a no mans land. That someone ended up being the government who then leased it out to whoever stayed. The lease rates were not so cheap that any more than a few people were willing to take advantage. For decades no one wanted to buy that land because it was really not profitable and all available cash was going to just building up some kind of viable unit anyway.

Now there is oil in them thar hills and suddenly this land that could barely feed a gopher is generating at least some kind of cash flow through surface revenue.

I think the question revolves around what is fair. Although private rented land is not the same as crown lease, I know of many cases where private land was rented out for years to one person or one family. Due to estate reasons and so on eventually the land needed to be sold. In just about every case the person farming the land got some kind of concession from the owners, some kind of special deal that recognized the renter’s stewardship of the land and the close working relationship between the owner and renter over many years. I would think the situation should be the same in Taber.

[Horse]

I have not had any personal envolvement in rented land being sold but I know of lots taken from 1 renter and gave to another without even a by your leave, mostly for more money that the original renter didnt even get a chance to match.
As for sold land the renter usualy gets first refusal as for stewardship I dont know of even 1 lease localy that would not be suspended for over grazing or loging if the rules were applayed now we dont have any large leases here mabey up to a section mostly 1/4 here and there.
As for crown land most has been in the same family since a lease was taken out and at a very cheap rate now some have bought leases for big money , well boo hoo if I pay to much for land who is going to feel sory for me? You do realize the rent we are talking about is $1.39/AUM in the north $2.79 or there abouts central and 3.29 for south plus taxes I guess you know what private rates are, and you wont get the oil cheque from the landlord. On crown land we also have to pay for the public lands branch and offices I am not real sure but I would almost bet the 3.5 mill we colect in rent dont pay the expences then there is the annual oil cheques totaling over 40mill 10yr ago emagine what they are now.
If you was to set down and figure out how much of an advantage those leases have provided say over 20 /25yr as compared to what it would have cost in intrest and taxes and the drain on capital and I think you will see that those leases have been very generous.

[coppertop]

Each year municipalities hold a tax sale of lands where property taxes have not been paid for a period of three years. In most cases that I am aware of the individual owing the taxes comes in and pays the arrears before the dealine, thus avoiding the loss of the land.

If the county has been leasing land to residents and the county decides in their wisdom to get out of the land owning business and sell, they must sell by tender process. They cannot just sell to the leasee. This may not seem fair but it is the way things must be done, the leasee will likely have the option of meeting the highest bid.

Horse, go easy on those $1500.00 a day boys, both my sons fit into that category and I am hoping they are putting a tidy sum aside each month to care for their dear old mother when the time comes !!!!!!! LOL

[farmers_son]

The provincial crown lease and the municipal land lease are very different. When you lease land from the province it is a long term capital lease with provisions for automatic renewal and a capital value if the leasee decides to transfer the lease to someone else. The municipal leases I am aware of are short term, for one to three years. Typically the lease is tendered every time it is renewed and I would expect when the municipality sells the land it would be tendered too.

[coppertop]

The Municipal Government Act requires that any land sold by municipalities must be done so by a public tender process.This includes lots within hamlets.

Most leases on municipal land are for a three year term although I know of some that are only for one year which doesn't give the leasee any certainty at all. Municipalities set the per acre rental during the setting of the rate schedule for all municipal rental items including rental of equipment such as portable sprayers, seeders etc.
In many cases within our municipality and others, there is no legal access to municipal owned land, so it only appeals to adjacent landowners. I am not aware of any municipal land being leased by a tender process although it may happen.
All oil revenue goes to the municpality, they negotiate the surface lease agreement and the leasee receives no compenstation with the exception that all gates and fences must be replaced. Leaseed municipal lands within this municipality are only to be used for grazing, no winter feeding can take place.

[farmers_son]

Horse: your comment “If you was to set down and figure out how much of an advantage those leases have provided say over 20 /25yr as compared to what it would have cost in intrest and taxes and the drain on capital and I think you will see that those leases have been very generous.” had me putting pencil to paper.

Assuming I had purchased a crown lease in 1967 for $4000 which in our area was probably fair, made yearly lease payments of $230 or so and transferred that lease today for $26,000, which I think is fair in our area that original investment would have generated an annual return of 2.5%.

If I had purchased deeded land at the same time I could have got it for $8000 a quarter and today that same land would be worth maybe $60,000. I would not have had to make lease payments and the taxes are paid by me whether I own the land or I lease the land. The annual return to me in this case would be 5% or double the return from my investment in the crown lease.

But of course the cost of the loan to purchase the lease land would be less. If I had borrowed the $4000 to purchase the crown lease and paid 9% interest for 20 years the total interest cost of the loan would be $4,763. Borrowing for the deeded land would have cost me $9,527 in interest over the term of the loan. A total saving of $4,764 in interest for the crown land. However that money was not all saved at once, it took 20 years to save that $4,764. The future value of that $4764 in 1967 would only have been $850.00. In other words the value of the reduced interest payments was worth $850.00 in 1967.

However the lease payments reflect an ongoing cost that go on forever, in other words a perpetuity. An annual payment of $231, using a 9% interest rate would suggest a perpetuity cost of $2,566 in 1967.

The crown lease was the most expensive land you could buy. Figuring back from the cost of deeded land which in those days was $8000 a quarter, subtracting the net of the savings in interest versus the perpetuity cost of the ongoing lease payments, if you wanted to just equal the return on investment for the crown lease that you would have realized on the deeded land it would have been necessary for someone to pay you $2000 cold hard cash up front just to take over the lease and make those lease payments for all those years and for all years to come. Yes, they would have to pay you to take that lease if you were to earn the same return on your investment that you could have earned if you had purchased deeded land instead.

[cowman]

Just back from some fun in the sun!
The big problem with this whole grazing lease thing is this:
The fact is if the Alberta government never had a lease holder on the Crown lands...the Alberta taxpayer would be millions of dollars ahead!
Now I understand the concept of property rights...and the courts have ruled Crown leases are real property...but the fact is if the "grazing leases" never had a cow on them the Alberta taxpayer would be way ahead? Defacto we pay people to run cows on the Crown land? That is a fact no one can deny? Horse is right on that one!
However, because the Alberta taxpayer really never sees his "oil money" in a real sense...who cares? Like farmers son says, why not give it to Joe down the road than let the beurocratic spendthrifts blow it? At least Joe will be supporting the local economy?
What should have been happening all along with Crown royalties/surface leases is: the people should have been getting the money...in their pocket...not into "government black holes"!
The "grazing lease holder" is getting one hell of a windfall in surface lease money? I can see "damages" but certainly not land values and entry fees? Would you expect to get the surface rights payment or right of entry payment on private land? Of course you wouldn't!Just won't happen.
So bottom line is: How do Horse and me compete on private land...with guys who are being paid to run cows on Crown land? I'm not sure what the deal is now but back in the early 90's the grazing fees for Alberta were $3 million...while the take from oil/gas activity was $40 plus million! This really is not fair.

[cowman]

I should have said "private rented land".

[coppertop]

Gosh cowman, I am glad to see you are back. I was really worried that something had happened to you, for instance you had fallen off your wallet and done serious injury to yourself !!!!!! LOL !!!

[Horse]

Its a fine day when cowman agrees with me glad to see you back I thought you may have gone to envade Montana to get Willowcreek .LOL

[coppertop]

Horse, he did say he was having fun in the sun, don't know if Montana sun is any warmer than ours this time of year, so likely he was somewhere in the tropics !!!!!

Oh well, we are a hardy lot, toughing it out in the snowbank, reading about all the money Randy made on his sale !!! Likely he will be the next one heading for a beach !!!!!!!