City Hall in Prince Albert, Sask., in December, 2023.Liam Richards/The Canadian Press
A Saskatchewan court has delivered financial salvation for the Embassy Church in downtown Prince Albert.
Embassy Church Inc. and the City of Prince Albert have been sparring over taxes for years, and last week the Court of Appeal for Saskatchewan ruled in favour of the non-denominational place of worship. Meghan Mayer, the lead pastor, planned to spread the news to members of her congregation.
“We will definitely celebrate it together, most likely giving thanks to God and to our lawyer,” she said in an interview last week.
The Court of Appeal largely sided with Embassy Church, a decision its lawyers said affirmed that a building owned by a religious organization and used primarily as a place of public worship should not be stripped of its tax exemption for generating occasional rental revenue. The exemption, the court said, removes a financial barrier that allows religious organizations to work for the good of the community.
“It would be incongruent with this purpose to demand exclusive use to qualify for exempt status,” Justice Jerome Tholl wrote in the decision. “If such exclusivity were required, a single bake sale by a community group held in a church basement, for which the church was paid $50 for the use of its space, would thwart the tax exemption for that building.”
Embassy Church owns a property dubbed Plaza 88 in downtown Prince Albert, steps from the North Saskatchewan River. The building hosts long-term commercial tenants and a daycare, and rents space for events such as wedding banquets, trade shows, meetings and children’s birthday parties. Rentals include an event supervisor; an on-site caterer is available.
For the 2023 assessment year, Prince Albert valued the property at $2.85-million, a figure Embassy Church did not dispute, according to Justice Tholl’s decision. The two sides differed, however, on how much should be tax-exempt given the property serves as a place of public worship.
The city assessor determined the portion of the property then used as a school was exempt, but the rest was fair game. This was a “dramatic change” from previous assessments, the court said.
Embassy Church agreed that a stand-alone convenience store and space leased long-term should be taxable, and that the then-school should be exempt. But it disputed the bill for the rest of Plaza 88, arguing that it serves primarily as a place of public worship.
The court’s decision noted that Ms. Mayer, in her affidavit, said Plaza 88’s room rentals comprised 12 per cent to 14 per cent of Embassy Church’s total income in 2020 and 2021.
Embassy, the court said, argued that “secondary uses of space predominantly used as a place of public worship is essential in modern times for religious organizations to remain financially viable.”
Ms. Mayer said about 220 to 250 people belong to Embassy Church, which was founded by her father. The organization, she said, would struggle if it had to pay the full tax bill.
“We wouldn’t be able to offer services to our community and operate as a church,” she said.
Embassy Church first appealed the assessment at the city level, then to the Assessment Appeals Committee of the Saskatchewan Municipal Board, which ruled largely in Embassy’s favour. Prince Albert then turned to the Court of Appeal.
The court, while dismissing Prince Albert’s appeal, rejected Embassy Church’s assertion that it should not have to pay property taxes on the portion of the building that operates as a daycare.
Oakbridge Law & Mediation, which operates out of the Embassy Church property and represented the religious organization, said the overall decision underlines that the tax exemption is not a favour but a policy instrument advancing community well-being.
“Churches across Canada, especially in Saskatchewan, can take confidence: principal worship spaces remain protected, even in multi-use buildings, because the exemption serves the public good,” the firm said in a statement.
The City of Prince Albert did not provide comment on the decision.