Executive summary: key legal and evidentiary issues

• The Town of Canmore enacted a bylaw creating a "Primary Residential" assessment subclass intended to allow the Town to impose a higher tax rate on residential properties not used as a primary residence, which the appellants challenged as exceeding the Town's statutory authority under the Municipal Government Act (MGA).

• Appellants argued that section 297(2) of the MGA limits residential subclasses to classifications based on the nature and characteristics of the property itself, not how frequently the owner chooses to use that property.

• Delegation of the municipal assessor's statutory authority to the chief administrative officer was contested as inconsistent with the MGA and related regulations.

• The Court applied the reasonableness standard of review to the bylaw as subordinate legislation, guided by the principles established in Auer v Auer and TransAlta Generation Partnership v Alberta.

• Certain provisions of the bylaw were amended post-decision, rendering the appellants' arguments regarding the chief administrative officer being "satisfied" language in section 5 moot.

• Both grounds of appeal were dismissed, with the Court affirming that the bylaw is reasonable based on the existing statutory scheme and is therefore intra vires.

The backdrop: Canmore's housing affordability challenge

In 2022, the Town of Canmore's Council adopted a strategic plan that identified livability and affordability as a priority. In June 2023, Town staff presented materials to Council indicating that local housing costs were high relative to other areas in Alberta, in part because of the relatively high number of residences that were not being occupied on a full-time basis. A task force was created to investigate and propose potential solutions. The task force presented a report in January 2024 containing various recommendations, including a recommendation to create an assessment subclass for property used as a full-time residence. Council directed administration to create an implementation plan.

The bylaw and its key provisions

In August 2024, a draft bylaw was presented to Council along with a report explaining that the bylaw was drafted to create a new assessment subclass. The Town subsequently passed revised by-law No 2024-19, Division of Class 1 Property Bylaw, as amended (the "Bylaw"). The Bylaw created a new "Primary Residential" assessment subclass within the "residential" property assessment class, among other subclasses, and also created a declaration and enforcement scheme to administer the Primary Residential subclass. The bylaw was intended to give Council the discretion to apply preferential tax rates to property that is primarily used as a full-time residence in order to incentivize the full-time use of residential property and collect additional tax revenue that may be applied to housing affordability initiatives. Under Section 4, a property "shall" be classified as Primary Residential in one of five specific circumstances. The first circumstance is satisfied if at least one dwelling unit on the property was used as a "Primary Residence" — defined as the place where a person is ordinarily resident for a period of at least 183 cumulative days, including 60 consecutive days, each year. The other circumstances include the use of the property as an apartment building, employee housing, residential storage, or a residential parking stall. Section 5 outlined circumstances where a property "may" be classified as Primary Residential even if the conditions in section 4 were not met in the previous taxation year, generally reflecting situations where the property could not be used as a Primary Residential property, such as where an individual was hospitalized or renovations prevented the occupation and normal use of the residence. To qualify under either section 4 or 5, a registered owner of the property is generally required to submit a specific declaration form relating to the previous taxation year. Section 6 provides a person shall not make a false or misleading statement in the declaration, and it is an offence under section 7 to do so, subject to a monetary fine of up to $10,000. Section 8 authorizes the chief administrative officer to conduct an inspection to ensure compliance with the declaration at any time within three years after it was made or required to be made. Section 9 of the Bylaw (which has since been repealed) provided for the imposition of a retroactive tax assessment if the chief administrative officer subsequently determined that a property failed to meet the criteria for inclusion in the Primary Residential subclass.

The lower court decision

The appellants — Stephen Ross, Leslie Skingle, Brian Talbot, David Taylor, Ralph Young, Devonian Development Corporation, and Three Sisters Mountain Village Properties Ltd. — challenged the Bylaw. In Ross v Canmore (Town), 2025 ABKB 258, the chambers judge, the Honourable Justice C.D. Simard, found most aspects of the Bylaw were intra vires, as a reasonable exercise of the municipality's authority under subsection 297(2) of the MGA and other relevant statutory provisions. However, section 9 of the Bylaw was repealed in accordance with the chambers judge's determination that it was ultra vires.

The statutory framework at issue

The appeal turned on the interpretation of section 297(2) of the MGA, which provides that a council may by bylaw divide class 1 (residential) into subclasses "on any basis it considers appropriate," and if the council does so, the assessor may assign one or more subclasses to property in class 1. The MGA also establishes the roles of municipal assessors, who must assign assessment classes and subclasses to property, and the chief administrative officer, who is the administrative head of the municipality and may delegate her powers, duties, and functions.

The appellants' arguments on appeal

The appellants advanced two main grounds of appeal. First, they argued that the ability to create residential assessment subclasses is limited to classifications that depend on the nature and characteristics of the property itself, rather than the owner's use of that property. They relied on the statutory definitions of "property" and "assessment" and the use of these terms in section 297, noting that assessors are generally tied to objectively appraising the market value of property. They also pointed to the non-residential class, where the Legislature expressly prescribed specific subclasses including "small business property," arguing that if the Legislature intended councils to be able to create use-based residential assessment subclasses, it would have done so expressly. Additionally, the appellants raised the concern that accepting the chambers judge's interpretation would open the floodgates to municipalities across Alberta potentially creating all sorts of improper subclasses, including subclasses based on the number of people who live in a residence. Second, the appellants argued that the Bylaw improperly delegates a municipal assessor's statutory authority to the Town's chief administrative officer in a manner inconsistent with the MGA and related regulations, specifically regarding (i) the assessor's role in assigning assessment classes and subclasses to property, and (ii) the assessor's role in conducting inspections.

The Court of Appeal's analysis

The Court of Appeal, composed of Justice Jolaine Antonio and Justice Bernette Ho (Chief Justice Ritu Khullar did not participate in the final disposition of the judgment), applied the reasonableness standard of review. On the first ground, the Court found the language "on any basis it considers appropriate" to be "broad, open-ended or highly qualitative language" that confers an equally broad scope of authority on the municipality, though that authority cannot be exercised arbitrarily and must always be exercised in accordance with the purposes for which it was delegated. The Court was not persuaded by the appellants' argument drawn from the non-residential provisions, noting that the Legislature's establishment of a highly constrained authority to divide the non-residential class into prescribed subclasses, immediately adjacent to a relatively unconstrained power to create subclasses for the residential class, suggested the Legislature turned its mind to constraints and applied them to non-residential assessment subclasses but chose not to apply them to residential subclasses. The Court further observed that the concept of use is frequently employed in the MGA to distinguish between different classes of property — for example, the residential class is distinguishable from the farm land class on the basis that it is not used for farming operations, and from the non-residential class largely on the basis that the land is used or intended to be used for permanent living accommodation. This supported the conclusion that it was reasonable for the Town to also employ the concept of use to delineate between different subclasses of residential property. The Court dismissed the floodgates argument, noting that any future cases would be open to judicial review on their merits.

The mootness question and delegation issue

On the second ground, the Court first addressed a preliminary mootness issue. After the Decision was released, the Town enacted Bylaw 2025-10, Division of Class 1 Property Amendment Bylaw 2025, which removed the reference to the chief administrative officer being "satisfied" from section 5. The Court concluded that issues arising from the removed language are moot, since the language had been removed from the Bylaw and was never applied in a way that impacted the taxes payable by anyone. The Court noted that judicial economy did not weigh in favour of opining on language that no longer appears in the Bylaw, and that the appellants were in effect requesting an advisory opinion in the abstract, which does not fit well with the traditional adjudicative role of courts. Turning to the remaining delegation arguments, the Court concluded that the Bylaw does not delegate the task of assigning subclasses when the statute contemplates that task being performed by an independent assessment professional. Rather, the Bylaw establishes the parameters of the Primary Residential class and assigns certain roles to the chief administrative officer regarding the forms through which the declarations are submitted, and it is ultimately left up to the assessor to assign the subclass based on these forms. Similarly, the chief administrative officer's role is limited to ensuring that false or misleading statements are not made in the declaration forms, which the Court found was not an unreasonable exercise of the Town's authority to enact bylaws for the enforcement of other bylaws, as expressly contemplated by the MGA.

The ruling and outcome

The Court of Appeal dismissed the appeal. The Court agreed with the chambers judge and concluded that the Bylaw is reasonable based on the existing statutory scheme and is therefore intra vires. The appeal was heard on December 8, 2025, and the memorandum of judgment was filed at Calgary, Alberta on March 12, 2026. The Town of Canmore, as the respondent, was the successful party. No specific monetary amount was awarded or ordered, as this case concerned a challenge to the validity of municipal legislation rather than a claim for damages or a specific sum.