Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 21, 2016 FILE NO.: WR 143242

Assessed Person(s): Cougs Tillings Ltd. Appellant(s): Cougs Tillings Ltd. Respondent(s): City of Pickering Property Location(s): Concession 3, Part Lot 20 Municipality(ies): City of Pickering Roll Number(s): 1801-030-011-17810-0000 Appeal Number(s): 2985623 Taxation Year(s): 2012 Hearing Event No. 635331

Legislative Authority: Section 357.(8) of the Municipal Act, 2001, R. S. O. c. 25, as amended

Heard: October 12, 2016 in Pickering, Ontario

APPEARANCES:

Parties	Representative
Cougs Tillings Ltd.	Evan Hovius
City of Pickering	Robert Heil

DECISION OF THE BOARD DELIVERED BY JOSEPH M. WYGER

INTRODUCTION

1In the north end of the City of Pickering (“City”), where Taunton Road crosses Whites Road is a parcel of raw land slated for residential development. A Plan of Subdivision (“Plan”) was registered on the 15.9 acre parcel on February 10, 2012 creating many residential building lots and dedicating certain roads, a one foot road widening and a one foot wide reserve to the City of Pickering. The assessed value as returned for the 2012 taxation year was $4,116,000 as residential development land. The final taxes payable were $54,802.

2Following the registration of the Plan, the current value remained at $4.116 million. MPAC apportioned all of that assessed value among the building lots and blocks retained by the Appellant and no value to the blocks that delineate the roads and reserves transferred to the City of Pickering. MPAC did not recognize or determine any exempt assessment within the Plan.

3The roads and reserves dedicated to the City comprised 4.69 acres of the site. The Appellant developer seeks a refund of property taxes on the basis that the 4.69 acres represents 29% of the property’s total assessed value and is exempt from taxation. It filed an application under s. 357.1(c) of the Municipal Act, 2001 seeking a refund as it asserts the land became exempt during the taxation year. The refund requested is $14,437. The City made no decision on the application, so the Appellant seeks a remedy from the Assessment Review Board pursuant s. 357.(8) of the Act.

Appellant’s Position

4The Appellant’s representative, Evan Hovius advanced the argument that the lands “transferred” to the City became exempt on the registration of the Plan of Subdivision. He calculated that the returned value of $4.116 million or $258,900 per acre meant that the 4.69 acres of land he values at $1,214,090 should be exempt from taxation by reason of s. 357.1(c) which permits a municipality to cancel, refund or reduce taxes if “the land has become exempt from taxation during the year…”. The application claims that upon the roads and reserves being “deeded” to the City, the assessment of the 4.69 acres is exempt, and a pro rata portion of the total taxes should be refunded.

The City Position

5The City was represented at the hearing by Robert Heil. He explained the City’s position of being statutorily bound to collect taxes on the assessed values provided by MPAC. He maintained that the City has no authority to decide the valuation of lands for tax adjustments or change the $4.116 million assessment returned by MPAC. The City can only refund taxes under s. 357(1) (c) if land becomes exempt, and MPAC has not identified or assessed any land that is exempt. MPAC provided the City with a Severance/Consolidation Plan Information Form (“SCIF”) which apportioned the overall value among all of the building lots created, but apportioned no value to the roads and reserves. Mr. Heil pointed to s. 356.(2) of the Municipal Act, 2001 dealing with apportionment, and asserted that the SCIF was a statement of relative value, and “the statement is conclusive” according to that provision.

6Mr. Heil called a witness from MPAC, Mike Cicciarella to support the City’s position. Mr. Cicciarella confirmed that roads and reserves are dedicated to the City upon the registration of the Plan. Roads and reserves are shown as “Blocks” on the Plan, are given no roll numbers, are not assessed, nor are they designated exempt from taxation. They are simply not considered in the valuation of the parcel. Mr. Cicciarella explained that the $4.116 million represented the overall value of the parcel as pre-registration residential development land, but did not represent the actual market value of 131 separately conveyable building lots.

DECISION

7The appeal is denied, and no rebate of taxes is warranted.

REASONS FOR DECISION

Legislation

Municipal Act

8Section 356. (1) and (2)

Division into parcels

356. (1) Upon application by the treasurer of a local municipality or to the treasurer by an owner of land, the local municipality may,

(a) divide, for the purposes of this section, land which is assessed in one block into two or more parcels if each parcel is one that can be legally conveyed under the Planning Act;

(b) apportion the unpaid taxes on the land among the parcels,

(i) in proportion to their relative value at the time the assessment roll for the year in which the application is made was returned, or

(ii) if council is of the opinion that an apportionment under subclause (i) is not appropriate due to special circumstances, any other manner; and

(c) direct what proportion of any part payment of taxes on the land is to be applied to each of the parcels.

Statement

(2) Upon the request of the local municipality, the assessment corporation shall provide a statement of the relative value of the parcels and the statement is conclusive

9Section 357.(1) (c)

Cancellation, reduction, refund of taxes

357. (1) Upon application to the treasurer of a local municipality made in accordance with this section, the local municipality may cancel, reduce or refund all or part of taxes levied on land in the year in respect of which the application is made if,

(c) the land has become exempt from taxation during the year or during the preceding year after the return of the assessment roll for the preceding year;

10Section 357.(7) states:

Appeal

357. (7) Within 35 days after council makes its decision, an applicant may appeal the decision of council to the Assessment Review Board by filing a notice of appeal with the registrar of the board.

11Section 357.(8) states:

Where no decision

(8) If council fails to make its decision by September 30 of the year following the year in respect of which the application is made, an applicant may appeal to the Assessment Review Board by October 21 of the year by filing a notice of appeal with the registrar of the board and the appeal shall be a new hearing.

12Section 357.(10) states:

Decision

(10) The Assessment Review Board shall hear the appeal and may make any decision that council could have made.

13Section 357.(17) states:

Decision final

(17) A decision of the Assessment Review Board is final.

ISSUES

14This appeal raises the question of whether the Board should assign a value for non-assessed roads and reserves based on a proportion of the value of the whole subdivision, designate that portion as exempt from taxation, and apply the proportionate discount to the total taxes payable.

ANALYSIS

15I accept and agree with the City and MPAC’s interpretation of s. 356 and s. 357 of the Municipal Act, 2001, that the Appellant is not entitled to any cancellation, refund or rebate of property taxes for the 2012 taxation year. I find no authority under the Municipal Act, 2001, to refund a portion of total taxes that is proportionate to the percentage of area that the streets are of the whole subdivision, where MPAC has assessed no current value to the streets and reserves. There are several reasons why:

1. The Board’s authority extends no further than a decision town council could have made: s. 357.(10). Mr. Heil argues that the council has no authority to assess or apportion values on any basis. I find that Daniels LR Corp. v. Brampton (City) [2016] O.A.R.B.D. No. 178 (“Daniels”), wherein the Board assumed such authority, to be distinguishable on its facts. The Member did not have an MPAC witness to explain the assessment process for lands being developed. Further, the SCIF in that case actually placed some values on some blocks that appear to be green space that MPAC had designated as exempt. The Member did not accept those values, opting to accept the same percentage of land area argument that is before me. I do not agree with that method and do not consider the decision binding.

2. Even if I could assign values for the purpose of calculating a refund, I disagree with the method used in Daniels, supra. I find that the Board should be required to value the portions on their correct current values and not on the basis of a proportionate share or fraction of the property’s pre-registration current value as a percentage of the whole property’s spatial area.

3. The SCIF represents MPAC’s view of the correct apportionment of the $4.116 million among the lots and blocks on the Plan. It assigns no current value to the roads and reserves, and I find its statement of those relative values is conclusive pursuant to s. 356.(2) of the Act.

4. There is a reason why roads and reserves are given no value after the registration of a Plan. Unlike other parcels of land that become exempt, but remain marketable, there is generally no market for the purchase of public highways and thus no current value. Section 357.(1) (c) was designed to deal with parcels whose classification may change from exempt to non-exempt and vice versa, a scenario not normally applicable to public highways.

5. The apportionment of the large majority of the lots and blocks are in the range of values from $16,000 to $30,000. I accept the evidence of Mr. Cicciarella that these are artificially low values that do not represent the full market values of legally created and marketable building lots. I find that it was not the intention of the statutory provision to provide the owner with the benefit of reduced taxes based on notional values of streets that have no real value, in addition to the reduced taxes enjoyed by the developer on the building lots that actually have significantly more value than is taxed.

CONCLUSIONS

16I agree with City Council’s position declining to determine what portion of the subject property became “exempt” and then calculating what portion of the taxes paid in respect of that portion should be refunded.

17I conclude that the 4.69 acres dedicated or transferred as roads and reserves to the City of Pickering, did not “become exempt from taxation during the year” in accordance with s.357.(1) (c) of the Municipal Act, 2001, and so does not qualify for a cancellation, refund or reduction of taxes.

18Alternatively, if they are found to be exempt, then I conclude that the basis for the calculation of any refund is MPAC’s apportionment of the current value among the various lots and blocks on the Plan, which apportionment assigns no value to the roads and reserves that are the subject of this appeal.

19The appeal is denied and no refund of taxes is warranted.