Linear Property Tax Claims Are Unsecured In Alberta

The Alberta Court of Appeal dismissed the appeal of three Alberta municipalities in Northern Sunrise County v Virginia Hills Oil Corp, 2019 ABCA 61 (Virginia Hills).^1 2 The dismissal confirms the June 20, 2017 Order of Justice Yamauchi of the Alberta Court of Queen’s Bench³ (QB Order) that held the Municipalities’ claims for taxes in respect of linear property (linear property taxes) against two oil and gas companies in receivership are unsecured claims under the Bankruptcy and Insolvency Act (BIA).⁴

What you need to know

• Provincial legislatures can override secured interests but only if this is the plain and unambiguous meaning of the provision intending to override such interests in its legislation. In Virginia Hills, the Court of Appeal held that section 348(d)(i) of Alberta’s Municipal Government Act (MGA), did not meet this test because if the section provided a special lien for unpaid linear property taxes, it would be ambiguous as to what “land and any