The Mineral Taxation Act, 1983 (Taxation Act) applies to approximately 40,000 freehold mineral titles in Saskatchewan.
Earlier this year, Saskatchewan enacted amendments to the definitions of "mineral Commodity" and "mineral title" in the Taxation Act. These amendments came into effect, retroactively, such that the changes are deemed to apply as of June 25, 2001. The purpose of the amendments was to confirm the Crown's authority to collect mineral rights tax on uncertified mineral titles. The Government of Saskatchewan is now considering further amendments to the Taxation Act through Bill No. 181: An Act to amend The Mineral Taxation Act, 1983.
Most of these proposed amendments fall into the categorization of modernization. Modernizing not only the language in the Taxation Act through replacing the pronoun "he" with "person" but also through permitting the Minister to modernize the taxation process by introducing an electronic management system.
While most of these changes will likely be welcomed or of little consequence to mineral owners, the proposed amendments also include some more substantive changes. The amendments would enable non-taxed individuals to voluntarily transfer their mineral titles to the Crown. The amendments also seek to provide the government with flexibility in terms of:
- determining the extent of ownership of a mineral title and the area covered by any mineral title;
- determining exemptions from taxation; and
- prescribing the taxation rate.
The amendments propose to have these matters addressed in the regulations. At this time, it is unclear as to how any associated regulations might vary from the existing requirements, however, mineral title owners should expect potential tax increases. In addition to potentially varying the current requirements for determining ownership, exemptions and rate of taxation, through prescribing these in regulation, it will make it easier to make future amendments, as they would not need to go through the Legislative Assembly.
The proposed amendments have gone through the second reading of the Legislative Assembly and have been referred to the Committee of the Economy for review. Following which Bill No. 181 will proceed to the third reading and a vote.
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