Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: April 16, 2019

FILE NO.: WR 156642

Assessed Person(s): Brigide Lortie and Yvon Couvrette

Appellant(s): Brigide Lortie and Yvon Couvrette

Respondent(s): Municipal Property Assessment Corporation (“MPAC”), Region 01

Respondent(s): The Nation Municipality

Property Location(s): 523 Concession Road 1

Municipality(ies): The Nation Municipality

Roll Number(s): 0212-012-001-01490-0000

Appeal Number(s): 3286556 and 3288777

Taxation Year(s): 2017 and 2018

Hearing Event No.: 703572

Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: September 26, 2018 in Casselman, Ontario

APPEARANCES:

Parties	Representative
Brigide Lortie and Yvon Couvrette	Self-represented
MPAC	Mario Gibeault
The Nation Municipality	No one appeared

DECISION OF THE BOARD DELIVERED BY JEAN-PAUL PILON AND JOSEPH JEBREEN

OVERVIEW

1Yvon Couvrette and Brigide Lortie (the “Appellants”) appeal the assessment of their property located at 523 Concession Road 1 in The Nation Municipality (the “Property”).

2The main issue raised by the Appellants is the proper classification of the Property. The Appellants claim that the Property is in the farm property class whereas MPAC’s position is that the Property should be classified partly in the farm property class and partly in the residential property class.

3The parties also disagree on the current value of the Property. MPAC returned an assessment of $455,000 but submitted at the hearing that the correct January 1, 2016 current value of the Property is $423,000. The Appellants take the position that the correct current value of the Property is between $343,000 and $400,000.

4For the reasons that follow, we do not have the authority to determine that a property belongs in the farm property class. However, we find that subsection 19(5) of the Assessment Act, R.S.O. 1990, c. A.31, as amended (the “Act”) applies to the lands and buildings of the Property.

5We further find that the January 1, 2016 current value of the Property is $400,000 and that no equitable adjustment is warranted. We therefore reduce the assessment from $463,000 to $400,000 for the 2017 taxation year and from $455,000 to $400,000 for the 2018 taxation year.

BACKGROUND

6The Appellants purchased the Property on August 30, 2013 for $400,000. The Property includes a single family, single storey residence built in 2004 that has floor space of 1,616 square feet (“sq. ft.”) and a quality of construction rating of 6. It also has a basement of 1,344 sq. ft., 1,000 sq. ft. of which are finished, two bathrooms and three bedrooms along with forced air heating and central air conditioning. The residence also has an attached garage of 840 sq. ft. and there is a 2,400 sq. ft. barn on the Property.

7The Property consists of a total of 35.28 acres of land. The parties agree that 19 acres of the land are farmable and that the remaining 16.28 acres are not. The 16.28 acres consist mostly of a wooded area, low quality soil or rock, and/or brush.

8In its original January 1, 2016 assessment, MPAC assessed the Property at $463,000, with $299,700 apportioned to the residential class and $163,300 to the farm class. Of the $299,700 in the residential class, $296,266 was the value of the buildings including $237,667 for the single family detached residence, $37,024 for the barn and $21,576 for the attached garage. The 35.28 acres of land on the Property was apportioned as follows: 25.96 acres of Class 2 soil farm land valued at $154,753, 8.32 acres of Class 6 soil farm land valued at $8,635 and 1.0 acre of “residential” land valued at $3,387. So, in the original 2016 assessment, 34.28 acres of the Property were in the farm class and 1.0 acre of the Property, the residence, and the barn were in the residential class.

9The Appellants requested a reconsideration of the assessment and MPAC subsequently issued a second assessment at $455,000, with $359,700 apportioned to the residential class and $95,300 to the farm class. Of the $359,700 in the residential class, $294,967 was the value of the buildings including $248,305 for the single family detached residence, $25,086 for the barn and $21,575 for the attached garage. The 35.28 acres of land on the Property was apportioned as follows: 16.0 acres of Class 2 soil farm land valued at $95,379, and 19.28 acres of “residential” land valued at $65,318.

10The major change between the two assessments is that MPAC classified 19.28 acres of the land as “residential” in the second assessment whereas only 1.0 acre was classified as “residential” land in the first assessment. The taxpayer has questioned MPAC’s decision to change the class of the Property when nothing relevant about the Property has changed. The taxpayer submits that the entire Property should be in the farm class.

11At the hearing, MPAC proposed that its reduced assessment of $455,000 be further reduced to $423,000, with $335,100 apportioned to the residential property class and $87,900 to the farm property class. MPAC also submitted that 19.0 acres of the land should be in the farm class and that 16.28 acres, the residence and the barn should be in the residential class.

ISSUE

12The issues to be determined in this appeal are:

i. Does subsection 19(5) of the Act apply to the Property, or any portion thereof?

ii. What is the correct current value of the Property for the 2017 and 2018 taxation years?

iii. Should there be an equitable reduction of the current value of the Property pursuant to subsection 44(3)(b) of the Act? If so, what should this reduction be?

13In addition to the 2017 taxation year, the 2018 taxation year is also before us because, pursuant to subsection 44(26) of the Act, a 2018 appeal is deemed to have been filed if the 2017 taxation year appeal was not finally disposed of before March 31, 2018.

LAW AND ANALYSIS

Does subsection 19(5) of the Act apply to the Property?

14We first note that we cannot make a determination that the Property is in the farm property class. The procedure to apply with respect to an appeal that raises an issue as to whether land should be classified as land in the farm property class is found at section 31 of the General Regulation under the Act, General, O. Reg. 282/98 (the “Regulation”).

15Pursuant to section 31 of the Regulation, the Board shall determine the applicability of subsection 19(5) of the Act and, if necessary as a result of that determination, redetermine the current value of the land. Section 31 makes it clear that the application of subsection 19(5) of the Act shall be deemed to be in issue if the current value of the land was not determined in accordance with that subsection. That is the case here.

16If there is still an issue as to whether the land should be classified as land in the farm property class, the Board shall refer the issue to the Agriculture, Food and Rural Affairs Appeal Tribunal (“AFRAAT”).

17Thus, the Board’s authority is to determine whether subsection 19(5) of the Act applies to the Property.

18Subsection 19(5) of the Act states:

Farm lands and buildings

(5) For the purposes of determining the current value of farm lands used only for farm purposes by the owner or used only for farm purposes by a tenant of the owner and buildings thereon used solely for farm purposes, including the residence of the owner or tenant and of the owner’s or tenant’s employees and their families on the farm lands,

(a) consideration shall be given to the current value of the lands and buildings for farm purposes only;

(b) consideration shall not be given to sales of lands and buildings to persons whose principal occupation is other than farming; and

(c) the Minister may, by regulation, define “farm lands” and “farm purposes”.

19The facts relating to the Property and its use are not seriously disputed. The Appellants purchased the Property from another farmer with the intent of continuing to farm the Property. They have and continue to live in the residence on the Property since their purchase. Although the Appellants have renovated the residence, the evidence in this appeal is that the use to which the Property is put has not significantly changed.

20After failing to farm the Property themselves, the Appellants leased their land to farmers. The most current tenant, Allan Seit Farms Inc. (“Allan Seit Farms”), has entered into a lease with the Appellants in which they rent the entire 35 acres. The lease was not in evidence, however the Appellants confirmed that it was in effect for the last two years. Allan Seit Farms ploughs and farms the land, using it to cultivate corn and make hay. Prior to Allan Seit Farms, another farmer rented the entire 35 acres from the Appellants for similar farming purposes. The barn was and currently is exclusively used by the tenant farmer as storage for its equipment. None of this evidence was contested and we accept it.

21Further, the parties agree that 19 acres of the land is farmable (the “Farmable Land”) whereas the other approximate 16.28 acres are not farmable (the “Non-Farmable Land”) because of the wooded areas and low soil quality.

22Mr. Gibeault, on behalf of MPAC, submits that the Non-Farmable Land should be in the residential property class because (i) that land is not farmable and (ii) the Appellants are not farmers. Mr. Gibeault further submits that the residence belongs in the residential property class because it is occupied as a residence by the Appellants. In terms of the barn, MPAC did not give a reason as to why it should be in the residential property class. MPAC agrees that the 19.0 acres of Farmable Land is in the farm class.

23The Appellants contend that the entire property belongs in the farm property class as per the wording of subsection 19(5). They also submit that it is unfair that their neighbour’s property is in the farm class whereas the Property is not. The Appellants expressed frustration that MPAC could change the property class without any change to the Property. They believe that they were targeted by MPAC because they challenged the assessment.

24We do not need to determine whether MPAC targeted the Appellants, as alleged. Rather, we note that when a taxpayer appeals an assessment, it is completely acceptable for MPAC to review its information, conduct an inspection of the Property, and issue a second assessment because it believes that its original assessment was in error. Of course, this does not mean that MPAC’s reassessment is necessarily correct. That is the purpose of this appeal.

25We first deal briefly with MPAC’s argument that the Appellants are not farmers themselves, and so, subsection 19(5) of the Act does not apply. This argument cannot succeed. Subsection 19(5) is clear that it can apply to the owner or a tenant of the owner.

26The real issues under subsection 19(5) are whether the lands are “farm lands used only for farm purposes” and whether the buildings on the farm lands are “used solely for farm purposes”. Neither party submitted any previous cases that considered subsection 19(5). However, the meaning of “farm lands used only for farm purposes” was considered by a panel of this Board in Delta Bingo Inc. v. Municipal Property Assessment Corporation, Region No. 18, 2013 CanLII 104841 (ON ARB) (‘Delta Bingo’). After reviewing numerous authorities on point, the Board concluded as follows at paragraph 36:

…the law as it currently stands holds that there are two elements to the determination of whether lands can qualify as “farm lands used only for farm purposes.” The Court of Appeal has approved the proposition that while the use of the lands for farming remains a predominant determinant, other factors such as those listed must be considered in order to characterize lands as farm lands in the first instance.

27The “other factors” to consider are listed in point form at paragraph 35 of Delta Bingo as follows: whether the lands have the physical characteristics of a farm, whether they involve a bona fide farmer, soil capacity, surrounding uses, and history of uses.

28Although the evidence was scant on some of these factors, there was sufficient evidence before the Board to determine on a balance of probabilities whether the lands and buildings on the Property satisfy the requirements of subsection 19(5). Specifically, there are four parts of the Property to consider: (i) the 19.0 acres of Farmable Land, (ii) the 16.28 acres of Non-Farmable Land, (iii) the residence and (iv) the barn.

Are the lands of the Property “farm lands used only for farm purposes”?

29First, we will consider the Farmable Land. The parties submit that the Farmable Land is properly in the farm property class. For the reasons below, we agree.

30The Farmable Land is clearly used for farming. The current tenant exclusively uses this land to cultivate corn and hay. Further, equipment is used to assist in the cultivation.

31On the first and third factors in Delta Bingo, as to farm characteristics and soil quality, it was not contested that the farmable lands had the physical characteristics of a farm. An aerial photograph showed that a large part of it had been ploughed, roughly in the proportion agreed to by the parties. While MPAC’s position and the Appellants’ position differ on the quality of soil of the Farmable Land, both agree that the soil is a good enough quality to be farmed.

32The second factor is whether there is a bona fide farmer. The Appellants testified that they had leased all of the land on the Property to Allan Seit Farms, and previously another farmer. This was not contested by MPAC.

33The fourth factor relates to the surrounding uses. MPAC also did not contest that the vicinity is entirely rural. The Appellants testified that the neighbouring lands are farmed and had been assessed as farmland. Similarly, the history of uses was not disputed by MPAC. The farmed land on the Property had previously been used as farm land.

34The use of the 19.0 acres of Farmable Land to farm corn and hay, as well as the other five factors considered in Delta Bingo, leads us to conclude that the Farmable Land is “farm lands used only for farm purposes”.

35The major disagreement between the parties is whether the 16.28 acres of Non-Farmable Land qualifies as “farm lands used only for farm purposes”.

36The Non-Farmable Land is used by the tenant farmer to either access the Farmable Land or to store some equipment or it is not put to any use. The evidence is that the entire 35 acres of land is leased to the tenant and that the tenant determines what to do with the land. In other words, if the land is not used by the tenant to support its farming of the Farmable Land, then it is not used at all.

37On the first and third factors in Delta Bingo, as to farm characteristics and soil quality, the Non-Farmable Land also has some physical characteristics of a farm. There is a barn, and the Non-Farmable Land directly abuts the Farmable Land on the Property. However, it is not disputed that the soil quality of the Non-Farmable Land is low, and not farmable.

38The second, fourth and fifth factors are the same as our analysis of the Farmable Land above and favour a finding that the Non-Farmable Land is farm lands used only for farm purposes. There is a bona fide farmer that leases the lands, and the locality is entirely rural with the neighbouring lands being farmed and being assessed as farm land. The history of the lands and the surrounding lands is that they were used for farming.

39To this we add that the photographs of the neighbouring lands have similar swaths of wooded land as the Property that do not appear to be farmable. Those neighbouring lands remain in the farm property class.

40Is the Non-Farmable Land considered to be “farm lands used only for farm purposes”? To answer this question, we do not solely rely on the use and the factors as they relate to the Non-Farmable Land. We also rely on this Board’s decision in Delta Bingo where a similar issue was considered at paragraphs 76 to 78:

76Mr. Fleet made the point that if 28 acres was farm land, and was the maximal usage for cultivation, it was unlikely that the remaining land-locked three acres would have any commercial value at all, and that it should not be severed from the farm. The Board agrees that the three acres remaining in 2012 was not capable of being cultivated because it was low and wet or had trees on it, or supported the farm use by drainage.

77Counsel provided several cases that support the proposition that areas like this on farms are nevertheless still farmlands:

A. City of Mississauga v. Dixieland Developments Inc. (1995) 33 OMBR 152 (OMB)… - hilly areas and areas bordering the tree line which were uncultivated were still part of the farm lands.

B. Ontario Regional Assessment Commissioner, Region No. 13 v. McConnell, 1981 CarswellOnt 1450 (A.R.B.), 12 O.M.B.R 212 - portions of a farm that are not amenable to the usual farming activities but are used for no other purpose should not be severed from the overall farm for the purposes of assessment.

C. Koren v. Municipal Property Assessment Corp., Region No. 14 [2002] O.A.R.B.D. No. 446 - a portion of farm that is seventeen acres of untillable swamp determined to be Class 6 farm land.

D. Esam Construction Ltd. v. Municipal Property Assessment Corp., No. 23 [2003] O.A.R.B.D. No. 114 - classifying five acres of bush as multi-residential is a “back door” attempt to assess based on zoning; “not necessary that every part of a farm be under cultivation for the entire farm to be classed as farm lands.”

E. Knightley v. Municipal Property Assessment Corp., Region No. 23 (2012) 73 O.M.B.R. 13 (A.R.B) - uncultivated swale land, drainage ditches and one acre bush lot that supports the farming activity is part of the farm.

78The reasoning in these cases is persuasive and applicable to the three acres of the lands that remained uncultivated through all the taxation years. The use of this acreage is related to the farming activities of Mr. Muileboom who made legitimate attempts to cultivate as much of it as possible, and had succeeded in 2012 to make maximal usage of the lands.

41We adopt these reasons as our own. The parties agree that the Non-Farmable Land is not cultivable because of the wooded, rocky areas and lack of soil quality. The decisions referred to in Delta Bingo support a finding that the Non-Farmable Land should not be carved off for assessment purposes. The entire 35 acres is leased to the tenant farmer who has exclusive use of these lands. The Non-Farmable Land is not used for any other purpose. We do not interpret subsection 19(5) to require that 100% of the farm lands be used only for farm purposes. This is especially the case where, as here, the land is not put to any other use and is in the tenant farmer’s control. Further, farm lands are not generally 100% farmable or used for farm purposes. There are ancillary lands that are not used at all or that support the farming activity. These lands are caught within the parameters of subsection 19(5).

42For these reasons, we find that the entire 35.28 acres of land are “farm lands used only for farm purposes” pursuant to subsection 19(5).

Does subsection 19(5) apply to the buildings on the Property?

43There are two buildings on the Property: the barn and the residence. We will first deal with the barn. The barn is leased to the tenant Allan Seit Farms as part of the 35 acres and is exclusively used by Allan Seit Farms to store its equipment, which in turn is used to farm or support the farming of the Property. We find that the barn is used solely for farming purposes and, therefore, subsection 19(5) applies.

44Before considering whether subsection 19(5) applies to the residence, we repeat the relevant portion of that subsection for ease of reference:

For the purposes of determining the current value of farm lands … used only for farm purposes by a tenant of the owner and buildings thereon used solely for farm purposes, including the residence of the owner or tenant and of the owner’s or tenant’s employees and their families on the farm lands… [emphasis added]

45The wording of this subsection suggests that the buildings, including the residence, must be used solely for farm purposes. However, this interpretation defies logic. A residence is, by definition, somewhere where people gather, eat, and sleep. It cannot be used solely for farm purposes. We must therefore consider a more contextual interpretation of subsection 19(5) that is harmonious with the scheme and object of the Act, and the intention of Parliament.

46We find that a more contextual interpretation of this subsection relies on what we believe to be the Legislature’s intent that a residence of the owner or tenant and of the owner’s or tenant’s employees and their families be valued according to subsection 19(5) as long as the residence is on the farm lands. That is the case here.

47In effect, subsection 19(5) deems the residence on the farm lands to be caught within its ambit.

48We therefore conclude that subsection 19(5) applies to all of the land and buildings on the Property. We will next consider the current value of the Property.

Current Value

49Subsection 40(17) of the Act states that MPAC has the burden of proving “the correctness of the current value of the land.” As this Board found in Jay Patry Enterprises Inc. v. Municipal Property Assessment Corporation, Region 05, 2019 CanLII 39629 (ON ARB), 2018 CanLII 70338 (ON ARB) (“Patry Enterprises”) at paragraph 21, the burden is around “current value” and not MPAC’s assessment. That is, MPAC is not required to prove the correctness of its returned assessment.

50Patry Enterprises summarizes the procedure to follow in an appeal where current value is at issue, at paragraph 40:

…first look at MPAC’s evidence on its own and make a determination as to whether it can prove its suggested current value on a balance of probabilities. If MPAC meets its burden, the Board should review all of the evidence before it and determine the current value of the property. However, if MPAC has not met its burden, the taxpayer’s evidence must be analyzed to see if it is capable of proving that a particular current value is more likely than not. If there is insufficient evidence in the record that is capable of proving current value, the Board should fix the assessment at the last uncontested assessed value.

Can MPAC’s evidence prove its suggested current value?

51As stated in Patry Enterprises, at paragraph 23, in order for MPAC to meet its burden, MPAC’s evidence “must show how the current value MPAC is proposing is arrived at and why that value is correct. Without this bare minimum, the Board cannot possibly determine if MPAC’s proposed current value is correct.”

52Mr. Gibeault for MPAC did not submit a written valuation report. Instead, he gave oral evidence and made submissions to explain documents that he entered into evidence. Mr. Gibeault testified that he arrived at the proposed current value of $423,000 by: subtracting (i) $87,900 for the value of the 19 acres of Farmable Land, and (ii) $25,000 for the barn, to arrive at a total of $310,100, which he says must be the value of the residence with an attached garage and 16.28 acres of Non-Farmable Land. Mr. Gibeault submitted a total of 15 sales of vacant farm lands in support of his determination that the Farmable Land was properly valued at $87,900. He also submitted a total of 17 sales of non-farm single family residential properties in support of his determination that the residence and Non-Farmable Land were properly valued at $310,100.

53MPAC has failed to meet its burden. When we asked for an analytical pathway from the evidence presented to MPAC’s proposed values of $87,900 and $310,100 from the sales presented using the direct comparison approach, MPAC was unable to provide one. MPAC submitted that those values and the ultimate current value were produced by its computer system but could not give any particulars of how the current value was calculated, or how the evidence it submitted supported a current value of $87,900 for the Farmable Land or $310,100 for the residence and Non-Farmable Land. The method used by MPAC of subtracting out its computer-determined values for the Farmable Land and the barn seems to us to be a flawed method that inevitably arrives at MPAC’s computer-determined current value. Indeed, no sales data was provided to support MPAC’s determination that the barn’s value is $25,000. We cannot blindly accept values just because those values are determined by MPAC’s model.

54To satisfy its burden when using the direct comparison approach, MPAC cannot simply present any properties. It must review the market data and select properties that are in fact comparable. In his evidence on the value of the Farmable Land, Mr. Gibeault submitted 15 sales of vacant farm land. However, no analysis was performed on those sales, no adjustments were made regarding inferior features of the comparable sales and no calculations were presented to come to a range of per acre values depending on soil type, or otherwise. The same is true for the 17 sales of single family residential sales – no adjustments were made and no analysis was presented to support MPAC’s proposed value.

55MPAC cannot tender a large number of sales of properties that span a range of values and submit that its proposed assessment is reasonable. MPAC must be able to prove how the proposed value was arrived at and why it is correct. Both of those elements are missing in this case.

56The minimum threshold in Patry Enterprises is not met, and so we find that MPAC has not met its burden.

Does the taxpayer’s evidence prove a current value?

57Following the framework in Patry Enterprises, if MPAC has not met its burden, we must analyze the taxpayer’s evidence to see if it is capable of proving that a particular current value is more likely than not.

58In response to MPAC’s evidence, the Appellant proposed a number of methods of determining current value. First, the Appellants relied on the original 2016 notice of assessment which indicated the following:

Classification	2012 Assessment	2016 Assessment
Residential (RT)	$282,300	$299,700
Farming (FT)	$72,700	$163,300
Total	$355,000	$463,000

59The Appellants submitted that because the valuation of the residential portion had increased by 6%, so should the farming portion ($72,700 X 1.06) to arrive at a value of $77,062 for the 2017 taxation year. Using this analysis and a static 2016 residential value of $299,700, the Appellants argued that the current value of the Property is $377,000.

60Alternatively, the Appellants relied on an article from an unknown source entitled “Ontario farmland price increases outpace national gains” which said that land value per acre in Eastern Ontario ranged from $2,300 to $14,500. The Appellants submitted that if it was determined that only 19 acres of the Property were viable farm land, being the Class 3 Farmable Land, the lowest value indicated in the article should apply resulting in a value of $43,700. The remaining 16.28 acres of Non-Farmable Land, the Appellants say, considered separately from the Farmable lands and the residence, are not accessible by road and cannot be the subject of an arms’ length transaction. The Appellants say that the Non-Farmable Land should therefore be determined to have a nominal current value of $1. Using this method, and assuming the correctness of the assessment of the residential portion at $299,700, this would result in a valuation of $343,000.

61The Appellants submitted other methods of calculating current value but were all based on the various assessments returned by MPAC.

62We do not accept any of these methods. None of them would have been useful in arriving at correct current value. The idea, for example, of increasing the value of the farm lands portion by the same proportion as the residential portion would be simple, but there was no evidence to suggest that the values of each type of land increased proportionately by the same amount between 2012 and 2016. Their argument that the value should be based on the amount indicated in an unsourced newspaper article should also not succeed in the absence of further information as to how that value was arrived at, by whom and for what specific area beyond “east” the per acre price applied to.

63Further, we must use sales data to determine current value, not assessments. Calculating a current value based on an assessment presupposes that the assessment is an accurate starting point. That may or may not be the case, but the point of an appeal is to determine the current value based on sales data. We therefore cannot accept the Appellants’ various submissions that the current value of the Property be determined based on assessments.

64Subsection 19(5) requires us to consider the current value of lands and buildings used only for farm purposes in determining the current value of the Property. The subsection further prohibits any consideration being given to sales of lands and buildings to persons whose principal occupation is other than farming. Only one comparable sale in evidence satisfies these criteria.

65Both MPAC and the Appellants rely on the sale of the neighbouring property directly to the west of the Property, with an address of 571-581 Concession 1 Road (the “Neighbouring Property”). It sold from a farmer to another farmer on December 1, 2017 for $340,000. The Neighbouring Property is 34 acres in size and the satellite photographs show that it has wooded areas like the Property. Based on the information provided by MPAC, the soil appears to be of higher quality with 31 acres in soil classes 2 and 3. The Neighbouring Property has two single family detached dwellings built in 1920 and 1981, measuring 1,898 and 1,702 square feet respectively. However, the Appellants admit that their residence is in superior condition. The Neighbouring Property also has a combination of nine barns and sheds as well as an open top silo, a summer kitchen, and a carport. Although the sale is nearly two years after the January 1, 2016 valuation date, we accept it as a comparable property because of its geographic proximity and similarity in terms of land. The two dwellings and outbuildings on the Neighbouring Property are inferior to the modern, high quality, residence and the barn on the Property, and so, we find that it is overall inferior to the Property.

66The Appellants also testified that they purchased the Property on August 30, 2013 for $400,000. The Appellants submit that this should be the current value of the Property, at its highest. Although the sale is two years and four months away from the valuation date, we nevertheless consider it to be the best evidence of the value of the Property on January 1, 2016. This is especially true given that the evidence of valid sales pursuant to subsection 19(5) of the Act is limited to one other property in this case.

67Based on the evidence of the sale of the Property in August 2013, we find that the January 1, 2016 current value of the Property is $400,000.

Equity

68Paragraph 44(3)(b) of the Act requires the Board to consider whether an equitable adjustment to the current value is required:

44(3) For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,…

(b) have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land.

69In Municipal Property Assessment Corporation v. Loblaw Properties Limited, 2017 ONSC 1299 (“Loblaw”), the Divisional Court specifically considered whether the test of “the same general nature, character or function” was approved by the Supreme Court of Canada in Regional Assessment Commissioner v. Downtown Oshawa Property Owners, [1978] 2 SCR 1030, 1978 CanLII 36 (SCC) (“Downtown Oshawa”). The Divisional Court found, at paragraph 22, that the Supreme Court of Canada in Downtown Oshawa did not adopt the test of the “the same general nature, character or function” as set out by the Court of Appeal in that case. Rather, the Supreme Court of Canada referred to “many points of comparison” in determining whether properties were similar. The Divisional Court further found, at paragraph 26, that the Downtown Oshawa decision “does not decide the appropriate test.”

70The Divisional Court in Loblaw confirmed, at paragraph 25, that the “the proper approach to be taken to determining what are “similar lands in the vicinity is… that all points of comparison must be considered.”

71The Divisional Court further found, at paragraph 25, that a single point of similarity, such as use, is not necessarily determinative of what “similar lands in the vicinity” are.

72In the analysis on current value above, we only used comparable sales that satisfied the criteria of subsection 19(5). We similarly find that properties in an equitable analysis must be lands and buildings used only for farm purposes. No consideration should be given to sales of lands and buildings to persons whose principal occupation is other than farming. We find that the points of comparison that must be considered for similar lands in the vicinity are:

a. Properties whose lands and buildings are used only for farm purposes;

b. With, at least, one single family detached dwelling;

c. Within 5 kilometres of the Property; and

d. That sold from 2014 to 2017.

73We note that it is the taxpayer’s burden to prove that an equitable adjustment is required. However, the Appellants did not present sufficient evidence or make any significant submissions relating to equity. The only property that qualifies as similar lands in the vicinity for equity purposes is the Neighbouring Property. It is the only property in evidence that satisfies all points of comparison listed above.

74The Appellants submitted that the Neighbouring Property’s assessment of $546,000, when it only sold for $340,000, shows a disparity between assessments and sales. Inequity cannot be proven by a single or small number of sales, and a statistically significant trend needs to be established to prove inequity, Municipal Property Assessment Corp. Region No. 9 v. Koifman, [2011] O.A.R.B.D. No. 49. In any event, this sale indicates that the Neighbouring Property is assessed at over 160% of its current value. While fairness may indicate that it would also be fair to assess the Property at 160% of its current value, the Act only permits equity adjustments “if such an adjustment would result in a reduction of the assessment of the land”.

75The Appellants also made fairness submissions regarding the classification of their Property as compared to their neighbours’ properties. Once again, this is not something that can be addressed in an equitable analysis under paragraph 44(3)(b).

76MPAC presented an equity report. However, none of the properties are farm lands used only for farm purposes with, at least, a single family detached dwelling.

77The evidence is not sufficient to determine whether the Property is inequitably assessed as compared to similar lands in the vicinity. Based on the evidence before us, we find that no equitable adjustment is required.

CONCLUSION

78Subsection 19(5) applies to all of the land and buildings on the Property. As part of the Property was previously classified in the farm property class, there is no need to refer this matter to AFRAAT. Accordingly, on the issue of classification, there is no apportionment and the entire Property is in the farm property class.

79The current value of the Property as of January 1, 2016 is $400,000 for the 2017 and 2018 taxation years and no equitable adjustment is required. The assessment is therefore reduced from $463,000 to $400,000 for the 2017 taxation year and from $455,000 to $400,000 for the 2018 taxation year.