Sponsor: Medicine Hat
Co-Sponsor: Red Deer

Issue

The length of time it takes Alberta Environment and Parks (AEP) to process assignments of ownership and renewals of grazing leases is excessively long. 

Background

Alberta's grazing lease system has been in place since 1881. More than 8 million acres of Alberta Crown land is used for grazing, and there are approximately 5,700 grazing disposition holders in Alberta.¹ Leaseholders provide upwards of $70 million in value to the Province of Alberta for their role overseeing Crown land under grazing dispositions. Grazing cattle is vital to maintain ecosystem function and wildlife habitat, and '...carefully managed cattle grazing and traditional ranching practices on long-term grazing leases contribute to the ecological health of large tracts of the continent's finest remaining native grasslands. Good stewardship and proper grazing management have helped retain much of the existing healthy native and intact rangelands.²

Grazing leases provide livestock producers with an economic grazing opportunity that allows their business to be sustainable. Thus, grazing leases are fundamental to Alberta livestock producers and directly impact the Alberta beef industry. From the government's perspective, there is economic value to having grazing disposition holders steward Alberta Crown land and ensuring modern rangeland management practices are followed. Livestock producers enhance the value of these lands and increase productive use of these lands by addressing issues like weed control, fencing the lands, monitoring usage, maintaining and improving the ecosystem, maintaining fences and water supplies, providing fire suppression and control of grasslands, managing and monitoring recreational and commercial access, and paying taxes on the land. 

Alberta's grazing leases are generally given for ten years terms and must be renewed by the grazing disposition holder once the term expires. For example, British Columbia has recently moved to a 25-year tenure on grazing leases, providing the leaseholder with greater stability and certainty that they will have the land to use for an extended period of time. It appears Alberta is one of the last provinces to have tenure for grazing leases under 20 years. 

There are specific rules that apply when a grazing disposition holder wishes to renew their grazing lease or transfer it to a third party. These renewals and transfers of ownership are reviewed and land inspected by the local lease inspector, before being sent to Edmonton for final processing by AEP. There is currently a backlog of up to two to three years. Contrast this to the mere weeks it takes for Special Areas to process a similar type of transfer or renewal for grazing leases within their area. 

AEP has stated that these delays are due to staffing shortages, lack of modern technology, and extensive due diligence to determine the lands' status in question. The ability of the grazing disposition holder to transfer/renew its lease and the buyer's ability to acquire the transferred lease must also be confirmed. 

Around 2017, AEP commenced a pilot project to reduce the turnaround time to process grazing lease assignments. The plan involved the development and institution of updated forms and increasing AEP staff to handle the assignments. The new forms unloaded a significant portion of the work previously performed by government employees to the parties and their lawyers. 

The pilot project was successful. During the pilot, the turnaround time was reduced significantly, in some cases down to 4 months. The pilot project suffered cutbacks: initially with a significant downsizing of the government employees in the team. Then in March 2020, the pilot project was wound down and the pre-existing process, together with its delays, returned. 

While we commend the government on the progress they are currently making at clearing out the backlog of renewals, there is still a large backlog of transfers. These renewal and transfer processes need to be streamlined and short processing times maintained to provide security to the grazing disposition holders, their advisors and any transferees seeking to purchase a grazing lease. 

When a buyer and seller are waiting for the transfer to be approved by AEP, the parties must determine how to handle the purchase funds involved in the transaction. The purchase funds are generally held in trust by a lawyer at a nominal interest rate, in which case the seller has no access to the funds to invest or pay down debt, use for retirement, or to pay out an estate. The buyer is equally unhappy because despite having had to put up the funds to purchase the lease and are likely paying interest on the funds, they cannot use the land, and they do not have certainty that they will be approved to hold the grazing lease. 

As all livestock placed on lease land must be owned by the registered leaseholder, the new proposed leaseholders cannot use the leased land until AEP has approved the transfer. A separate application must be made to get approval to graze the land until the lease is finally approved or rejected, adding another layer of red tape. Furthermore, new leaseholders are generally hesitant to invest in range or infrastructure improvements to the subject lands when the transfer or renewal has not been completed out of fear that AEP may not approve their assignment. 

Even though grazing lease renewals are generally approved in practice, if the lands were utilized according to the lease terms and deemed healthy, there is no legislative requirement for AEP to renew the grazing lease. AEP has the legislative ability to cancel or refuse any renewals. This creates uncertainty about whether the grazing lease will be renewed, mainly since the backlog in the system results in the grazing disposition holder operating on an expired lease while they await approval of the renewal. 

The current length of time it takes to approve a lease renewal or a transfer impedes commerce and creates unnecessary risk to the parties involved. Furthermore, it creates uncertainty in the livestock sector, inhibiting the ability to make long term plans and investments by livestock producers and can affect proper rangeland management. Invested capital is tied up in the transfer process, and returns on that investment (through the ability to graze) are not realized, significantly impacting business operations. 

Recommendations

The Alberta Chambers of Commerce recommends the Government of Alberta:

1. Streamline the approval process for grazing lease transfers and renewals to less than three months and ideally less than one month; 
2. Establish a system wherein grazing disposition holders can track where their application is in the queue; and 
3. Implement a grazing-lease option that is 25 years or longer in term.

Resources

1. Alberta Grazing Leaseholders Association, Policy Brief - Crown Land Grazing Dispositions: Spring 2019: https://albertagrazinglease.ca/downloads/2019/Crown-Lands-Grazing-Brief-Spring-2019.pdf 
2. Alberta Grazing Leaseholder Value Estimates Report 2020: https://albertagrazinglease.ca/downloads/2020/SUMMARY-POINTS-Alberta-Grazing-Leaseholder-ValueEstimates.pdf

Approved: May 2012
Renewed: May 2021
Completed: January 2024 - we were advised that the recommendations had been achieved.