Executive Summary: Key Legal and Evidentiary Issues

• Scope of municipal tax exemptions under s. 262(1)(c) and (e) of The Cities Act for property owned by a registered independent school and used partly as a place of public worship.
• Distinction between “occupation” of property by a school for exemption purposes and the additional requirement that specific buildings or portions be “used primarily” as prescribed educational facilities under s. 18 of The Cities Regulations.
• Evidentiary dispute over whether large portions of the 175,000 square-foot complex were truly “vacant commercial space” or functionally used in support of school and church activities.
• Adequacy of the Board of Revision’s and the Municipal Board Committee’s reasons, particularly the Committee’s failure to analyze the statutory “use” requirements in s. 262(1)(c)(ii) and s. 18.
• Role of prior exemptions granted to the former owner under special legislation and their irrelevance once the property changed hands, requiring CRC to qualify strictly under the general statutory scheme.
• Appellate intervention limited to correcting an error of law (incomplete application of the legislative test) and remitting the exemption question for fresh fact-finding rather than substituting the Court’s own assessment.

Background and property at issue

The Canadian Revival Centre Corporation (CRC) is a religious organization that operates a Kindergarten to Grade 12 registered independent school and a place of worship in Prince Albert, Saskatchewan. It purchased a substantial property at 1405 Bishop Pascal Place and moved into it in late August or early September 2022, just before a new school semester began. The main structure is a large school and dormitory complex, supplemented by a gymnasium, swimming pool, several garages, storage facilities, and a gazebo. Previously, when owned by The Sisters of the Presentation, the entire property had been exempted from municipal taxation. That exemption, however, rested on a special statute—The Sisters of the Presentation Act, 2010—which applied only to the former owner. Once CRC acquired the property, any tax relief had to be justified strictly under the general provisions of The Cities Act and its regulations.

Assessment decision and partial exemption

For the 2023 taxation year, the property was assessed as commercial property with a value of $6,297,500. That assessment classification and value were not in dispute. What was contested was the extent of the tax exemption CRC was entitled to claim as a registered independent school and as a place of public worship. The City assessor inspected the property, reviewed CRC’s information, and consulted the Ministry of Education. Applying s. 262(1)(c) of The Cities Act, the assessor exempted only those areas actively used for the independent school: the two floors of the south wing designated as school space and the gymnasium. Under s. 262(1)(e), the assessor exempted the portion of the premises used as a place of public worship, consisting of the chapel, mezzanine, certain offices, and associated common areas that served as entry and circulation for worship services. The assessor concluded that substantial portions of the building were vacant and not being used for school or worship purposes. Some areas were identified as possible future childcare space, while other vacant portions were being marketed for commercial leasing, including space in the auditorium, chapel, gymnasium, recreation centre, and commercial kitchen. On this basis, the City treated those vacant areas as commercial in character and taxable. Overall, the main building was found to be 36% exempt and 64% taxable, and the remaining buildings on the property were fully taxable, resulting in a taxable assessment of $3,445,980 after exemptions.

Statutory framework for school and worship exemptions

CRC’s entitlement to an exemption as a school turned on s. 262(1)(c) of The Cities Act, which exempts property that is: (i) owned and occupied by a registered independent school, and (ii) comprised of “prescribed buildings” and prescribed amounts of land used in connection with those buildings. The Regulations, specifically s. 18, define the categories of prescribed buildings. These include dormitories for students, portions occupied by residential supervisors, kitchens and dining rooms for students, buildings or parts used primarily for the purposes of an independent school, and storage or maintenance buildings used for the school. The Regulations also prescribe how much associated land can be exempted, tying it to the amount and kind of exempt building space. Separately, s. 262(1)(e) of The Cities Act grants exemptions for every place of public worship and the land used in connection with it, subject to limits on the quantum of land, a requirement that the property be owned by a religious organization, and an exclusion for portions used as a residence or for non-worship purposes. In the litigation that followed, there was no real disagreement over the portions of the property the assessor had already exempted under the place of public worship provision. The core controversy centered on the interpretation of s. 262(1)(c) and the Regulations, and on whether the yet-unexempted portions of the buildings and lands qualified as prescribed educational facilities used primarily for school purposes.

Proceedings before the Board of Revision

CRC appealed to the Prince Albert Board of Revision, arguing that the entire property should be exempt from taxation because all of it was functionally dedicated to its school and religious mission. It emphasized that it had just moved from a much smaller 16,000 square-foot facility into a 175,000 square-foot property and that it needed time to occupy and configure all areas for its expanding educational and religious operations. The City countered that the legislative scheme tied exemptions to actual, present use and occupation, not to potential or planned future use. The Board of Revision reviewed the City’s methodology and concluded that the City had followed the procedures in The Cities Act for establishing base land rates, standard parcel sizes, and market adjustment factors, and that the inspection and communications regarding taxable and exempt areas had been properly undertaken. It noted that potential future uses of space and comparisons based on past exemptions (such as the earlier exemption under The Sisters of the Presentation Act) could not drive the current assessment. Determining the property’s use as of January 1 of the relevant year was the critical statutory reference point. Accepting the City’s explanation and approach, the Board dismissed CRC’s appeal and confirmed the taxable assessment of $3,445,980, leaving the assessor’s partial exemption intact.

Appeal to the Municipal Board’s Assessment Appeals Committee

CRC then appealed the Board’s ruling to the Assessment Appeals Committee of the Saskatchewan Municipal Board. Before the Committee, the core issue was framed as whether the Board had erred in determining which portions of the property were liable to and exempt from taxation. CRC argued that the property was “owned and occupied” within the meaning of s. 262(1)(c) because it was present, operating both a school and a church on the site, and using the facilities in a way consistent with its religious and educational purposes. It contended that “occupied” did not require every room or area to be in active day-to-day use to qualify. The City maintained that the disputed areas were vacant, not in school or worship use, and in some cases were actively being marketed for commercial leasing. In its reasons, the Committee observed that the Board had provided no real analysis of the application of s. 262 to the facts. The Committee rejected the City’s approach to “occupation,” finding that the Act did not require every room or portion of the property to be in active use. Relying on the judicial interpretation of “occupy” as including control and power over property, the Committee concluded that CRC was indeed occupying the property, even if parts remained vacant. It further reasoned that the concept of occupation in this context was intended to prevent organizations from acting as absentee landlords—owning property and renting it out for others’ purposes—rather than to penalize them for having unused space on premises they control and use for their own activities. On that basis, the Committee held that the Board had erred and ruled that the entire property was exempt from taxation under s. 262, effectively overturning the City’s partial-exemption assessment.

The City’s appeal to the Court of Appeal

The City of Prince Albert sought and obtained leave to appeal to the Court of Appeal for Saskatchewan. The legal question on appeal was narrowly framed: whether the Committee had erred in law by incorrectly interpreting and applying s. 262 of The Cities Act. The focus was s. 262(1)(c), the school exemption provision, rather than the worship provision in s. 262(1)(e), which did not appear to be significantly in dispute. The City argued that the Committee’s analysis was incomplete because it treated “occupation” as the only operative condition under s. 262(1)(c)(i) and did not address the additional statutory requirement that buildings and land must fit within specific “prescribed” categories and prescribed amounts under s. 262(1)(c)(ii) and s. 18 of The Cities Regulations. In other words, in the City’s view, the Committee had focused solely on whether CRC occupied the property, while ignoring whether the disputed space was in fact being used in the way the Regulations demand, such as being used primarily for the purpose of an independent school or for dormitory, kitchen, or storage functions directly tied to the school. CRC responded that the Committee had taken a holistic approach, that it was not necessary to refer expressly to each subsection or regulation, and that once occupation by a registered independent school was established, the property as a whole should be seen as exempt under s. 262.

Appellate analysis of occupation and use requirements

Justice Tholl, writing for a unanimous Court, applied the modern statutory interpretation approach and undertook a plain reading of the relevant provisions. The Court identified a multi-part test inherent in s. 262(1)(c) and the Regulations: the property must be owned and occupied by a registered independent school; the school must be owned or operated by certain types of not-for-profit or corporate entities; buildings must fall within the prescribed categories in s. 18(1), each of which carries a use component; and any exempt land must be within prescribed limits and used in connection with the exempt buildings. The Court held that the Committee’s reasons addressed only one piece of that test—occupation under s. 262(1)(c)(i)—and did not grapple with s. 262(1)(c)(ii) or s. 18 at all. By failing to examine whether the disputed portions of the property fell into the categories of prescribed buildings and were used primarily for school purposes (or related dormitory, kitchen, or storage functions), the Committee omitted a critical statutory step. This omission was characterized as an error of law. The Court accepted that there was no controversy over CRC’s status as a registered independent school, its ownership of the property, or its operation through a qualifying entity. Nor was there any dispute that some portions of the property were clearly used primarily for school purposes and had been correctly exempted. However, the crux of the dispute lay in the treatment of the areas the City had labelled “vacant commercial space” and the extent to which those spaces met the statutory use requirements. The Court highlighted that, for example, under s. 18(1)(d), a building or part of a building must be used primarily for the purpose of an independent school to qualify for exemption. The Committee’s reasons did not address this use requirement in relation to the contested spaces.

Remedy and outcome of the appeal

Having found a legal error in the Committee’s failure to apply the full statutory scheme, the Court then considered the appropriate remedy. The City urged the Court to treat the evidence as clear and uncontroverted—namely, that the disputed areas were vacant and not used for school or worship purposes—and to simply reinstate the Board of Revision’s original partial-exemption decision. CRC, on the other hand, maintained that those areas were used in supportive roles for the school and church, pointing to garages, storage spaces, the gazebo, and pool areas as functionally integrated into its educational operations and emphasizing the transitional nature of its early occupancy of the campus. The Court concluded that the factual record was not sufficiently clear or complete to permit it to make the necessary findings regarding use. There were inadequate findings of fact by the Board and no meaningful analysis by the Committee on how the disputed spaces were actually being used under the categories in s. 18 of the Regulations. Because of this evidentiary gap and the contested nature of the evidence, the Court declined to substitute its own assessment of which specific portions of the property should be exempt. Instead, the Court allowed the City’s appeal, set aside the Committee’s decision, and remitted the matter to the Assessment Appeals Committee for a new hearing focused on what additional portions, if any, should be exempted beyond those areas already recognized by the assessor. No costs were awarded to any party in relation to the appeal or the earlier application for leave. In practical terms, the City of Prince Albert emerged as the successful party at the Court of Appeal. However, the Court did not fix any specific tax amounts, nor did it order any monetary award, damages, or costs in favor of the City; the total amount of any tax that may ultimately be payable or further exempted will depend on the Committee’s fresh determination, and no quantifiable monetary sum in favor of the successful party can be determined from this judgment.