Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

December 16, 2021

FILE NO.:

WR 167643

Assessed Person(s):

2198806 Ontario Inc.

Appellant(s):

2198806 Ontario Inc.

Respondent(s):

City of Windsor

Property Location(s):

250 Dougall Avenue

Municipality(ies):

City of Windsor

Roll Number(s):

3739-040-050-00700-0000

Appeal Number(s):

3274175 and 3329157

Taxation Year(s):

2016 and 2017

Hearing Event No.:

735171

Legislative Authority:

Sections 364(14) and 357(7) of the Municipal Act, 2001, S.O. 2001, c. 25

APPEARANCES:

Parties

Counsel

2198806 Ontario Inc.

Joseph Jebreen and Scott McAnsh

City of Windsor

John L. O’Kane

HEARD:

September 10, 2020 by video conference

ADJUDICATOR(S):

Joanne Laws, Member

DECISION

OVERVIEW

1In March 2011, 2198806 Ontario Inc. (the “Company”) purchased a nine-storey hotel located at 250 Dougall Avenue in the City of Windsor (the “Property”). In 2015 the Company began major demolition and renovations to rebrand the Property from a Quality Suites to a Towne Place Suites by Marriott.

2The Property operated at a reduced capacity until May 1, 2016 at which time the hotel was fully closed to complete the demolition and renovations. It reopened on or about November 23, 2017.

3The Company sought and received property tax relief from the City for the 2016 taxation year pursuant to ss. 364 and 357 of the Municipal Act, 2001, S.O. 2001, c. 25 (the “Act”) and for the 2017 taxation year pursuant to only s. 357 of the Act. The Company asks the Board to increase the quantum of relief for both the 2016 and 2017 taxation years.

4Sections 364 and 357 have been reproduced in an addendum to this decision. For the purpose of this decision, any reference to ‘relief' includes cancellation, reduction, refund, or rebate of property taxes.

Issues for the Hearing

5The issues to be decided in this proceeding are:

1. For the 2016 taxation year:

a) Is there an appeal pursuant to s. 357 of the Act before the Board?

b) If not, should the Board vary the amount of the rebate granted by the City under s. 364 of the Act?

2. For the 2017 taxation year:

a) Is the Property eligible for relief pursuant to s. 357(1)(d)(ii) due to demolition or otherwise?

b) If the Property is eligible for relief pursuant to s. 357(1)(d)(ii), should the quantum be varied?

c) Is the Property eligible for relief under s. 357(1)(g)?

i) Did the Company appeal under s. 357(1)(g)?

ii) Are the requirements of s. 357(1)(g) met?

d) If the taxpayer does not qualify for relief under s. 357, can the Board consider relief pursuant to s. 364?

e) If the taxpayer is entitled to relief pursuant to s. 364, what is the quantum?

Result

6For the 2016 taxation year:

a) There is no proper s. 357 appeal before the Board.

b) The Board grants relief under s. 364 of the Act in the amount of $32,547.62 for the period of May 1, 2016 to December 31, 2016.

7For the 2017 taxation year:

a) The Property is ineligible for relief pursuant to both s. 357(1)(d)(ii) and s. 357(1)(g) of the Act.

b) The Board cannot consider relief pursuant to s. 364 of the Act.

PRELIMINARY MATTER – REASONABLE APPREHENSION OF BIAS

8Joseph Jebreen and Scott McAnsh, Counsel for the Company, are former Members of this Board. Both were prohibited from appearing before this Board for a period of one year after the end of their appointments. These time limitations ended prior to the hearing of these appeals.

9At the commencement of this hearing, Mr. Jebreen made mention of a reasonable apprehension of bias because he, Mr. McAnsh and I were Members of this Board at the same time. Mr. Jebreen did not make a formal motion nor did he ask that I recuse myself.

10John O’Kane, Counsel for the City, said he was aware of Mr. Jebreen and Mr. McAnsh’s previous positions with this Board. He submitted that the one-year prohibition protocol provides a passage of time meant to deal with any apprehension of bias and that, in these circumstances, the City is satisfied that none exists.

11Having received no motion to recuse myself, and agreeing with Mr. O’Kane’s position on this issue, I proceeded with the hearing.

ANALYSIS

Issue 1 - 2016 Taxation Year

Issue 1(a) - Is there a 2016 taxation year appeal pursuant to s. 357 of the Act before the Board?

12For the 2016 taxation year the Company applied to the City of Windsor (the “City”) for property tax relief. Two applications were made. The first was for relief as a result of repairs or renovations pursuant to s. 357(1)(g) of the Act. The City granted relief in the amount of $34,090.73 for “repairs and renovations”. The Company did not appeal this decision. However, it argued that the appropriate amount of relief pursuant to s. 357 is $169,248.09 (gross) and $135,157.36 (net).

13The second was a vacant unit rebate application pursuant to s. 364 of the Act for the ground floor restaurant area. The City granted relief in the amount of $975.59. In response to that decision, the Company filed a complaint with this Board under s. 364(14).

14At the commencement of the hearing the Company stated its intention was to appeal the City’s s. 357 decision, rather than file a complaint for the s. 364 decision. The Board provided the Company an opportunity to investigate whether it had in fact appealed the City’s s. 357 decision and for the parties to make post-hearing submissions.

15In its post-hearing submissions, the Company confirmed that it had not appealed the City’s s. 357 decision. The Company argued that the Board should convert the s. 364 complaint for the ground floor restaurant area to an appeal pursuant to s. 357 for the entire Property. The Company also argued that the Board’s Rule 49 provides the Board with the authority to consider a s. 357 appeal because the statement of issues and responses pled were pursuant to that section, not s. 364. In the alternative, the Company argued that a vacant unit rebate pursuant to s. 364 should be considered for the entire Property.

16The City argued that the Board’s jurisdiction is not a result of pleadings, which are procedural construct flowing from the Board’s Rules of Practice and Procedure[1] (“Rules”) made under the Statutory Powers and Procedure Act. The City argued there is no s. 357 appeal before the Board, that no appeal fee was paid, that despite the requirements of the Act the Company did not use the s. 357 appeal form, and, that the Company failed to meet the deadline to file a s. 357 appeal.

Findings on Issue 1(a) - Is there an appeal pursuant to s. 357 before the Board?

17There is no dispute that the Company did not appeal the City’s s. 357 decision for the 2016 taxation year.

18The Company asks the Board to consider a s. 357 appeal when none was filed. The Board must therefore determine whether the Act should be interpreted to permit the Board to do so.

19For the reasons set out below, the Board finds that the Act does not permit the Board to make a determination for relief pursuant to s. 357 when no notice of appeal was filed in accordance with s. 357(7). There is no provision that would allow the Board to enlarge its authority under s. 364, the complaint received, to create an appeal pursuant to s. 357 and there is no legislative provision to create an appeal that was not made.

20The purpose and intent of both s. 357(1) and s. 364 is to provide the taxpayer with relief in specific circumstances. The Company argued that the Board ought to, in effect, create an appeal pursuant to s. 357(1) of the Act because it was relying on its pleadings as though it had made an appeal under that section of the Act.

21In Québec (Communauté urbaine) v. Corp. Notre-Dame de Bon-Secours, 1994 CanLII 58 (SCC), [1994] 3 SCR, (“Notre Dame”) the Supreme Court of Canada provided guidance on the approach to statutory interpretation with respect to taxation legislation. The following is a summary of the Court’s approach:

1. The interpretation of tax legislation should follow the ordinary rules of interpretation;

2. A legislative provision should be given a strict or liberal interpretation depending on the purpose underlying it, and that purpose must be identified in light of the context of the statute, its objective, and the legislative intent: this is the teleological approach;

3. The teleological approach will favour a taxpayer or the tax department depending solely on the legislative provision in question, and not on the existence of predetermined presumptions;

4. Substance should be given precedence over form to the extent that it is consistent with the wording and the objective of the statute;

5. Only a reasonable doubt, not resolved by the ordinary rules of interpretation, will be settled by recourse to the residual presumption in favour of the taxpayer.

22In interpreting the Act, the Board must apply the “modern” principal of statutory interpretation, that the words of a statute must be read “in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”: Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, (“Bell”) at paragraph 26. In Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, 2019 S.C.J., No. 65 at paragraphs 117-121, (“Vavilov”), the Supreme Court of Canada clarified that a tribunal’s interpretation of legislation must be consistent with its “text, context and purpose”.

23The Courts are clear that tax relief provisions should be liberally interpreted in order to provide essential justice: see paragraph 13 of 2397146 Ontario Inc. v Brampton (City), 2018 CanLII 37737 (“Brampton”). However, at paragraph 17 of that decision the Board explained that this does not mean that the Board may exceed the confines of the Act:

Essential justice must be accomplished within the confines set out in the legislation. There is no broad power to make taxpayers whole. Rather, the legislation sets out how that objective is to be achieved. Subsection 357(1) sets out the grounds of relief, which are broad, but the legislation also sets clear deadlines for applications and appeals. The remedial purpose of the tax refund provisions does not rewrite the legislation.

24In Toth Equity Limited v Ottawa (City), 2015 CanLII 21998 (ON ARB) (“Toth”) the Board found that using the incorrect application form for an appeal to the Board is not a fatal error when seeking relief and referenced the rules for interpreting taxation legislation as outlined in Notre Dame.

25There is a distinction between this matter and Toth. In Toth, the Board determined that a determination for relief can be granted pursuant to s. 357(1)(f) where the appeal form for s. 334 was used. Both s. 334 and s. 357(1)(f) are nearly identical. Both provide for a cancellation, reduction, or refund of taxes due to a gross or manifest error, a clerical error, a transposition of figures or a typographical or similar error in calculations of taxes. Section 357(1)(f) is slightly expanded with the words “but not an error in judgement”. For both types of applications, an appeal to the Board is made under s. 357(7) or (8). By contrast, the reasons and procedures for relief under s. 357(1) and s. 364 are different. Section 357 requires an appeal and the amount of relief is discretionary whereas s. 364 requires a complaint, municipalities are required to have a vacant unit rebate program in place, municipalities are permitted to include exceptions and special rules (see s. 32 of O. Reg. 325/01 for the City of Windsor) and the amount of the relief is legislated. A decision under s. 357 is made by “council” at a meeting at which the applicants may make representations, whereas a decision under s. 364 may simply be mailed to the applicant by the municipality.

26Due to the differences outlined above, the Board does not find the reasoning in Toth is applicable to the present matter.

27This is not simply a matter of the wrong form being used to appeal to the Board. Rather, the Board has the wrong type of decision before it. As stated in Toth at paragraph 26, “the scope of the appeal to this Board is determined by the scope of the application made to the City.”

28Therefore, the Company’s position cannot be supported. Had the legislature intended to grant the Board the power to create an appeal that was not made it would have expressly set that out. It cannot be said that the Company simply filled out the wrong appeal form with the Board. City council made a separate decision under s. 357, which was not appealed to the Board. The Board cannot, in the context of a s. 364 complaint, consider an appeal of a different decision for a different type of relief in relation to a different building area.

29Further, the Board disagrees with the Company’s argument that Rule 49 of the Board’s Rules provides the Board with the authority to consider a s. 357 appeal because the pleadings were made for that section of the Act. The Board’s Rules on pleadings set out the expectations of parties with respect to the appeals that have in fact been filed, to ensure that both parties are given adequate notice of the issues and an opportunity to respond. The intention of Rule 49 was to limit the parties from raising new issues except in exceptional circumstances. The Board finds that its Rules do not permit the Board to create an appeal that was not made and do not override the provisions of the Act.

30There is no proper s. 357 appeal before the Board, the Company did not file an appeal under this section for the 2016 taxation year and the Board does not have the jurisdiction to create such an appeal. The Board’s authority is limited to the relief available under s. 364(16), which is to determine the amount of any relief owing to the applicant on a s. 364 application.

Issue 1(b) - If there is not a s. 357 appeal before the Board for the 2016 taxation year, should the Board vary the amount of relief granted under s. 364 of the Act?

31In addition to providing submissions on entitlement to relief under s. 357(1), the Company argued that, in the alternative, relief can be granted under s. 364 for the whole Property. The Company also argued that the relief calculated by the City was based on a notional value provided to the City by the Municipal Property Assessment Corporation (“MPAC”) rather than on the assessed value as returned on the roll. The Company’s evidence is that the taxes levied ($196,800.10) were based on the assessed value as returned rather than the notional value.

32Janice Guthrie, the City’s Deputy Treasurer, Taxation and Financial Projects, testified that the City’s practice is to obtain a notional value of a property from MPAC when processing applications for tax relief, that the notional value represents MPAC’S opinion of the residual value of a property where relief is being sought. The City argues that the quantum of relief should be based on this notional value.

33The Company’s s. 364 application to the City and the subsequent complaint made to this Board deals with a vacant unit rebate for 2,400 square feet identified as the main floor restaurant portion of the Property for the period of January 1 to May 31, 2016. The Company asks the Board, when determining the amount of a vacant unit rebate, to consider the period of May 1 to December 31, 2016. This is the undisputed period that the entire property was vacant.

34The Company’s calculation of its entitlement to a rebate under s. 364 was based on the amount of taxes paid and on the provisions found in s .4 of O. Reg. 325/01.

Findings on 1(b) - Should the Board vary the amount of relief granted under s. 364 of the Act?

35The Board must determine whether the Act should be interpreted to consider a vacant unit rebate for all or part of 2016. For the following reasons, the Board grants relief under s. 364 of the Act in the amount of $32,547.62 for the period May 1, 2016 to December 31, 2016.

36Neither party disputes that the Property is an eligible property for a vacant unit rebate pursuant to s. 364 of the Act nor that the Property was wholly vacant for the period of May 1 to December 31, 2016.

37The Board’s powers on a complaint under s. 364(16) are: “in a complaint under subsection (14) or (15), the Assessment Review Board shall determine the amount of any rebate owing to the applicant” (emphasis added). The Courts are clear that a tribunal’s interpretation of legislation must be consistent with its text, context and purpose (Bell, Vavilov). The purpose and intent of s. 364 is to provide tax relief for eligible properties. The Courts are clear that tax relief provisions should be strictly or liberally interpreted to provide essential justice but that this does not mean that the Board may exceed the confines of the Act (Notre Dame, Vavilov). In terms of the text, the word “any” in s. 364(16) is intended to allow the Board flexibility within the bounds of entitlement under s. 364. Therefore, the Board concludes that considering a vacant unit rebate for an eligible property for the entirety of the 2016 taxation year provides essential justice while not exceeding the confines of the Act.

38Section 3(1) of O. Reg. 325/01, the regulations made pursuant to s. 364 of the Act, lists the information that an application under s. 364 must contain (emphasis added) which includes, among other things, the period for which a vacant unit rebate was sought and the square feet area of the eligible portion of the Property. The word ‘must’ would not have been included in s. 3(1) of O. Reg. 325/01 had the legislature intended such discretion. In this instance, the Company provided the periods for which the vacant unit rebate applies and, for the restaurant portion, the square foot area of the eligible portion of the restaurant. The Company did not provide the square foot area for the total building area. However, the Board does not consider the square foot area necessary to make a determination for the period of May 1 to December 31, 2016 because during that time the entire property was vacant rather than a portion.

Notional Value

39The legislated value of relief pursuant to s. 364(2)2 is 30%. For the 2016 taxation year the Property was assessed at $4,187,000. The City obtained a notional value from MPAC of $2,417,646.

40The City argues that the quantum of the relief should be applied against MPAC’s notional value while the Company argues that the quantum should be applied against the assessed value as returned because that is the value upon which the taxes were paid. The Company’s evidence is that the taxes paid were $196,800.10 based on the assessment as returned.

41Section 2(2)1 of O. Reg. 325/01 provides that the quantum of relief calculation under s. 364 includes taking “the value of the eligible property for the year as determined by the assessment corporation.”

42The Board finds that the correct interpretation of “as determined by the assessment corporation” (s.2(2)1) cannot be any value other than the value returned on the roll. There is no evidence that the assessed value as returned on the roll is anything other than $4,187,000. The City called no witnesses to support the notional value of $2,417,646. Nor did it tender any evidence that the assessment returned on the roll was altered. The only document the City submitted was entitled “MPAC’s Response” (the City’s Exhibit CD3) which included both the assessed value as returned as well as the notional value.

43Neither the Act nor the Regulations refence a notional value of assessment. In Drewlo Holdings Inc. v. London (City), [2005] O.A.R.B.D. No. 333 (“Drewlo”) which has been cited in numerous subsequent decisions by this Board, 792132 Ontario Inc v. Kingston (City), [2009] O.A.R.B.D. No. 168, Town Homes of Thornhill Village Inc. v. Markham (Town), [2009] O.A.R.B.D. No. 17, Michalakos v Mississauga (City), 2020 CanLII 27455 (ON ARB) and Toth, the Board addressed the issue of a notional value in relation to tax relief:

The Board finds that nowhere in either the Assessment Act or the Municipal Act is there any basis for developing a notional value, which in fact, ignores the assessment of the real property as returned for the taxation year.

In Town Homes of Thornhill Village Inc. v. Markham (Town), [2009] O.A.R.B.D. No. 17

the Members concluded:

… There is no basis in either the Municipal Act or the Assessment Act for introducing a notional value for purposes of calculating a tax reduction, and the legislation nowhere authorizes an adjustment to the assessment of a property in calculating a tax reduction.

44The first step to calculate the amount of relief under s. 364 is set out in sections 1 and 2 of O. Reg. 325/01 which does not reference a notional value. Section 2(1) defines “base property” as the “real property whose assessment on the roll returned under the Assessment Act, R.S.O. 1990, c. A.31 for the taxation year…”. Section 2(2) of O. Reg. 325/01 provides the manner in which the relief is calculated:

s. 2(2)1. Take the value of the eligible property for the year as determined by the assessment corporation.

s. 2(2)2. Determine the percentage that the value of the eligible property is of the assessed value of the base property for the taxation year.

45Based on the plain reading of s. 2(2) of the O. Reg., the “value of the eligible property… as determined by the assessment corporation” must mean the assessment as returned on the roll.

46Accordingly, the Board finds that the value upon which the quantum of relief must be calculated is $4,187,000, the assessed value as returned for the 2016 taxation year. That is the value upon which the taxes were levied and paid: $4,187,000 x 0.04700265 mil rate = $196,800.10.

The Quantum of Relief

47Subsection 364(16) provides that the Board “shall determine the amount of any rebate owing to the applicant.” The legislature contemplated that a taxpayer may seek relief under both s. 357 and 364, where eligible, because of the provision found in s. 4 of O. Reg. 325/01. That provision provides how the s. 364 relief is recalculated where the taxes are reduced under s. 357 (see Canadian Property Holdings (Ontario) Inc. v Municipal Property Assessment Corporation, Region 15, 2017 CanLII 78332 at paragraphs 6 and 9 in which the Board concluded that where a taxpayer applied for relief under both sections, it would not be ‘double dipping’).

48The Board finds that the eligible relief pursuant to s. 364 for the period of May 1 to December 31, 2016 is $32,547.62, calculated as follows:

Original taxes levied:

$196,800.10

Amount of s. 357 rebate

$ 34,090.73

Adjusted taxes levied:

$162,709.37

X 30%:

$ 48,812.81

Less restaurant vacant rebate for May 2016*

$ 190.65

Adjusted for 245/366 days:

$ 32,547.62

*(($975.59 /152 days (January 1 to May 31, 2016)) x 31 days (May 2016) = $ 190.65

49Interest applies in accordance with s. 364(20) of the Act.

Issue 2 - 2017 Taxation Year

50The Company applied to the City for property tax relief for the 2017 taxation year. The evidence is that Company made one application to the City seeking relief pursuant to both s. 357(1)(d)(ii) (demolition) and (g) (repairs or renovations). The City granted relief in the amount of $22,204.01 for ‘repairs and renovations’ but its decision did not include the word ‘demolition’. In response to the City’s 2017 determination, the Company filed an appeal to this Board pursuant to s. 357(7) of the Act. The Company argued that the City should have used the assessment as returned of $4,001,000 for the 2017 taxation year to calculate the quantum of relief and argued that the relief would have been $185,926.95 based on the loss of income.

51Ms. Guthrie testified that the City makes its quantum of relief determinations under s. 357 on a case-by-case basis and that its overall best practice is to provide a quantum of 30% for circumstances similar to those of the Property.

52On the application form (Company’s Exhibit 1-J), the Property’s address is correct. However, both the roll number and the owner’s name are incorrect. Neither party took issue with these errors, agreeing that the applications apply to the Property.

53The parties’ submissions were primarily directed at the quantum of relief under s. 357(1)(d)(ii) and (g), which is discretionary. However, before the quantum of relief can be addressed, the Board must first be satisfied that the Property is eligible for relief under those provisions. As provided in s. 357(10) of the Act, the Board “may make any decision that council could have made”, which would include a finding that there is no entitlement to relief under s. 357(1)(d)(ii) and (g) of the Act. The Board asked the parties for their submissions on entitlement to relief under s. 357(1)(d)(ii) and (g) of the Act. In addition to providing those submissions, the Company argued in the alternative that relief can be granted under s. 364.

54For the reasons set out below, the Board finds that the Company does not qualify for tax relief under either s. 357(d)(ii) or (g). The Board further finds that there is no s. 364 complaint before the Board, that the Company did not file an application to the City or a complaint to the Board under this section for 2017 and the Board does not have the jurisdiction to create such a complaint.

Area of Agreement

55There is no dispute that the Property was fully closed for the period of January 1, 2017 to November 22, 2017 and reopened on November 23, 2017 with the exception of the 9th floor.

Issue 2(a) - Is the Property eligible for relief pursuant to s. 357(1)(d)(ii) due to demolition or otherwise?

56Relief is available under s. 357(1)(d)(ii) if “during the year or during the preceding year after the return of the assessment roll, a building on the land … was damaged by fire, demolition or otherwise so as to render it substantially unusable for the purposes for which it was used immediately prior to the damage.”

57Ms. Guthrie testified that the City processed the application pursuant to s. 357(1)(d)(ii) of the Act and that the City is aware of the different provisions in s. 357 which is reflected in the City’s evidence (the City’s Exhibits CD5 and CD6). However, the Board notes that the relief granted, ‘repairs and renovations’, is provided under s. 357(1)(g), not (d)(ii).

58The Company argued that the City erred in not granting relief based on demolition. The Company also argued that s. 357(1)(d)(ii) of the Act captures the renovations, in addition to demolition, because the words “or otherwise” incorporate renovations and repairs.

59The Company provided status reports from Pure Building Group, the firm that managed the demolition and renovations. The report for July 2016 shows that demolition was complete for floors 2 through 8 and was 90% complete for the ground floor and 50% complete for the 9th floor. The status report for the month ending January 2017 shows that the demolition for floors 1 through 9 was 100% complete and the ground floor was 100% complete except for the lobby and the “rear of house” office area.

60Mr. Gupta, testified he was the project manager, overseeing the rebranding process and visited the Property on a regular basis during that time. He testified that he did not prepare the Pure Building Group reports but that they accurately depict the status of the project. He testified that the “rear of house” office area had not been fully demolished for part of 2017. The photographic evidence shows that the main floor area surrounding this space was undergoing renovations at that time including the installation of electrical, metal wall studs, and drywall.

61Mr. Gupta testified that the Property resumed hotel operations on November 23, 2017 except for the 9th floor, that the rooms on that floor were left vacant to provide roof access for mechanical installations such as a HVAC. The evidence is that renovations were complete or ongoing on the 9th floor and roof areas in 2017 but not demolition.

Findings on Issue 2(a)

62For the following reasons, the Taxpayer is ineligible for relief pursuant to s. 357(1)(d)(ii).

63For ease of reference s. 357(1)(d)(ii) is replicated here:

(d) during the year or during the preceding year after the return of the assessment roll, a building on the land,

(ii) was damaged by fire, demolition or otherwise so as to render it substantially unusable for the purposes for which it was used immediately prior to the damage;

64Regarding “the preceding year after the return of the assessment roll”, the roll return date is defined in s. 36(2) of the Assessment Act as “not later than the second Tuesday following December 1”. For the 2016 taxation year that date is December 13, 2016. The evidence before the Board does not establish that the demolition occurred during the period of December 13 to 31, 2016.

65Whether or not the City referenced damage by demolition in its decision, based on the wording of s. 357(1)(d)(ii), the Board finds that the Property does not qualify for relief because the demolition which caused it to be substantially unusable occurred prior to 2017. The evidence is that the only demolition that occurred in 2017 was the “rear of house” office area on the main floor. The Board finds that this relatively small area of the Property did not render the building to be “substantially unusable for the purposes for which it was used immediately prior to the damage”.

66The Board disagrees with the Company’s argument that the term “or otherwise” in s. 357(1)(d)(ii) captures repairs or renovations. As “repairs or renovations” are expressly listed as a ground for relief in s. 357(1)(g), it would not be the Legislature’s intention to duplicate this ground for relief in the general term “or otherwise”. Accordingly, the requirements of s. 357(1)(d)(ii) are not met with respect to repairs or renovations.

Issue 2(b)- Should the quantum of relief provided under s. 357(1)(d)(ii) be varied?

67The parties made extensive arguments regarding the appropriate quantum of relief and the manner in which the City’s discretion should be exercised.

Findings on Issue 2(b)

68The Board has found the Property is not eligible for relief pursuant to s. 357(1)(d)(ii). Therefore, the quantum of relief does not require consideration.

Issue 2(c) - Is the Property eligible for relief under s. 357(1)(g)?

2(c)i - Did the Company appeal under s. 357(1)(g)?

69As noted above, the Company applied to the City for relief pursuant to both s. 357(1)(d)(ii) and (g). In appealing the City’s decision, only one reason was selected on the appeal form: s. 357(1)(d)(ii). The City argued that this means that the Board cannot consider s. 375(1)(g). The Board rejects that argument for the following reasons.

70When applying for relief under s. 357(1) of the Act, both the City’s application form and the Board’s appeal form indicate that only one reason may be selected. This may stem from the word “or” found at the end of paragraph s. 357(1)(f).

71The evidence is that the Company intended to appeal under both provisions and directed its representative to do so. Included with the Company’s appeal form is a September 25, 2018 email from Jarek Cholewa, the Company’s representative at that time, directing its employee, Nadia Costa, to appeal the City’s decision under both 357(1)(d)(ii) and (g).

72The Board accepts the Company’s argument that choosing only one of the nine s. 357 provisions for relief in its appeal should not mean that the other provisions considered by the City do not apply. The decision under appeal before the Board is the decision made by the City. That decision was made based on an application that claimed relief under both s. 357(1)(d)(ii) and (g). The Act does not limit the issues that the Board may consider in adjudicating an appeal of the City’s decision under s. 357. Rather, the Board’s obligation is to ensure, as a matter of procedural fairness, that the City knows which grounds are being raised on appeal.

73The Board finds that it is possible that a taxpayer could have more than one reason for seeking relief pursuant to s. 357(1) of the Act. Forms do not dictate what the statute requires nor does the statute expressly state that separate applications or appeals are required for each reason relief is sought under s. 357(1) of the Act. In the context of s. 357(1) the Board concludes that the word “or” found at the end of paragraph 357(1)(f) does not mean that separate applications are required for each ground but rather suggests that one ground is enough to qualify a property owner for relief.

74Based on the application form and the appeal form with its accompanying email, the Board is satisfied that the Company filed an application and filed an appeal pursuant to both s. 357(1)(d)(ii) and (g). The Board finds this sufficient to consider eligibility under both (d)(ii) and (g).

2(c)ii - Are the requirements of s. 357(1)(g) met?

75The City’s position is that the Property is not eligible for relief pursuant to s. 357(1)(g) due to an exception set out in s. 357(1.1) of the Act. The Company acknowledged that had it applied for relief only under s. 357(1)(g) then the limitation set out in s. 357(1.1) would result in ineligibility for relief for repairs and renovations under s. 357(1)(g)

76Although the Board finds it appropriate to consider relief under paragraph (g), it finds that the Company is not entitled to such relief. Section 357(1.1) provides:

Exception, vacant unit rebate

(1.1) For 2007 and subsequent taxation years, no cancellation, reduction or refund of taxes is permitted under clause (1)(g) in respect of prescribed land.

77In O. Reg. 325/01, “Eligible property” is defined, in part, as follows:

Eligible property

(1) A building or structure on property that is classified in one of the commercial classes or industrial classes or in the landfill property class is prescribed to be an eligible property for the purposes of the Act for a period of time if,

(a) the period of time is at least 90 consecutive days; and

(b) no portion of the building or structure was used at any time in the period of time.

(2) A portion of a building on property that is classified in one of the commercial classes or in the landfill property class is prescribed to be an eligible property under section 364 of the Act for a period of time if the period of time is at least 90 consecutive days and throughout the period of time,

(a) the portion of the building was not used and was clearly delineated or separated by physical barriers from the portion of the building that was used; and

(b) the portion of the building,

(i) was capable of being leased for immediate occupation,

(ii) was capable of being leased but not for immediate occupation because it was in need of or undergoing repairs or renovations or was under construction, or

(iii) was unfit for occupation. O. Reg. 325/01, s. 1 (2); O. Reg. 300/03, s. 2 (2); O. Reg. 97/17, s. 2 (2).

(4) The following rules apply for the purposes of subsections (1), (2) and (3):

2. The following, in the absence of other activity, does not constitute the use of a building or structure or a portion of a building:

i. Construction, repairs or renovations of the building, structure or portion of the building.

78Section 10 of O. Reg. 325/01 provides that “prescribed land” for the purpose of that exception is the “eligible property” described in s. 1 of that regulation. The rebate under s. 364 of the Act is only available with respect to such “eligible property”. The combined effect of these provisions is that property that is eligible for a rebate under s. 364 of the Act is not eligible for tax relief under the ground in s. 357(1)(g).

79For the 2017 taxation year the Property is an eligible property for a vacant unit rebate because it meets the requirements. No portion of the building was used for a period greater than 90 days, other than for construction, repairs or renovations. However, due to the exception found in s. 357(1.1), s. 357(1)(g) cannot be engaged. Therefore, the Property is not eligible for relief under s. 357(g) for the 2017 taxation year.

Issue 2(d) - If the Property does not qualify for relief under s. 357(1)(g), can the Board consider relief pursuant to s. 364?

80In the alternative to its arguments under s. 357, the Company made the argument that the City processed the application as a vacant unit rebate pursuant to s. 364 of the Act because it provided a 30% quantum of relief, which is the legislated quantum pursuant to s. 364(2)2 of the Act. The Company argued that using the incorrect application form should not preclude relief under s. 364.

81Ms. Guthrie testified that the City did not receive an application under s. 364, only s. 357(1) and that the City processed the application pursuant to s. 357(1). She testified that the City notified the Company of the council meeting at which the application was to be considered however no one attended on behalf of the Company.

82Ms. Guthrie acknowledged that, based on the circumstances, the taxpayer qualifies for relief pursuant to s. 364 but that the City did not receive such an application for the 2017 taxation year. The City argued that the Board cannot grant relief pursuant to s. 364 because no such application was made to the City.

Findings on Issue 2(d)

83For the 2017 taxation year the City did not receive an application nor did the Board receive a complaint for a vacant unit rebate pursuant to s. 364. Neither the application nor the appeal made references s. 364. The evidence is that the City granted relief under s. 357 despite the fact that the Company was ineligible for relief under that section. This is not simply a matter of the wrong form being used to appeal to the Board. Rather, the Board has the wrong type of decision before it. As stated in Toth at paragraph 26, “the scope of the appeal to this Board is determined by the scope of the application made to the City.”

84The decision being appealed in this matter was made by City council at a meeting held in accordance with s. 357(5) of the Act. The Board’s powers on appeal are limited to making “any decision that council could have made”, which are the powers set out in s. 357(1). Those powers do not include granting a rebate under s. 364. Conversely, on a s. 364 complaint, the Board may determine the amount of a rebate owing under s. 364, but that is only after a municipality makes a determination, or fails to make a determination in the required time, in an application for a rebate under that section. There was no decision by the City under s. 364 for the 2017 taxation year, and as such there can be no s. 364 complaint.

85The Board does not accept the Company’s argument that the City in effect made its decision under s. 364. The Board accepts the City’s evidence that its decision was made under s. 357(1). The evidence is that the City’s council meeting at which the application would be deliberated occurred and the Company was not represented.

86The Board is unable to consider an appeal that was not commenced. The Act does not provide the Board with the ability or discretion to deem a s. 364 complaint that was not made.

87It is unfortunate that the Company may very well have been entitled to a tax rebate under s. 364 but did not apply to the City for that relief. However, on a s. 357 appeal, the Board’s powers are to “make any decision that council could have made”. Council could not have made the decision to grant s. 357 relief when there was no entitlement under that section. The Board cannot grant relief under s. 364 when no s. 364 complaint is before it.

Issue 2(e) - What is the quantum of relief pursuant to s. 364?

88Having found that the taxpayer is ineligible for relief pursuant to s. 364, the quantum of relief does not require consideration.

CONCLUSION

89For the 2016 taxation year:

1. There is no proper s. 357 appeal before the Board.

2. Under s. 364 the rebate owing is determined to be $32,547.62 for the period of May 1, 2016 to December 31, 2016.

90For the 2017 taxation year:

1. The Property is ineligible for relief pursuant to both s. 357(1)(d)(ii) and s. 357(1)(g) of the Act.

2. The Board cannot consider relief pursuant to s. 364 of the Act.

ORDER

91For the 2016 taxation year, for the period of May 1, 2016 to December 31, 2016, the rebate owing is determined to be $32,547.62.

92For the 2017 taxation year the Board dismisses appeal number 3329157.

"Joanne Laws"

JOANNE LAWS

MEMBER

Assessment Review Board

Website: www.tribunalsontario.ca/arb

Addendum - The Legislation

Section 357 of the Act provides, in part:

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,

(a) as a result of a change event, as defined in clause (a) of the definition of “change event” in subsection 34 (2.2) of the Assessment Act, during the taxation year, the property or portion of the property is eligible to be reclassified in a different class of real property, as defined in regulations made under that Act, and that class has a lower tax ratio for the taxation year than the class the property or portion of the property is in before the change event, and no supplementary assessment is made in respect of the change event under subsection 34 (2) of the Assessment Act;

(b) the land has become vacant land or excess land during the year or during the preceding year after the return of the assessment roll for the preceding year;

(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;

(d) during the year or during the preceding year after the return of the assessment roll, a building on the land,

(i) was razed by fire, demolition or otherwise, or

(ii) was damaged by fire, demolition or otherwise so as to render it substantially unusable for the purposes for which it was used immediately prior to the damage;

(d.1) the applicant is unable to pay taxes because of sickness or extreme poverty;

(e) a mobile unit on the land was removed during the year or during the preceding year after the return of the assessment roll for the preceding year;

(f) a person was overcharged due to a gross or manifest error that is clerical or factual in nature, including the transposition of figures, a typographical error or similar error but not an error in judgment in assessing the property; or

(g) repairs or renovations to the land prevented the normal use of the land for a period of at least three months during the year. 2001, c. 25, s. 357 (1); 2002, c. 17, Sched. A, s. 62; 2002, c. 22, s. 158; 2004, c. 31, Sched. 26, s. 6.

Exception, vacant unit rebate

(1.1) For 2007 and subsequent taxation years, no cancellation, reduction or refund of taxes is permitted under clause (1) (g) in respect of prescribed land. 2007, c. 7, Sched. 26, s 1; 2017, c. 8, Sched. 19, s. 7 (1).

Regulations

(1.2) The Minister of Finance may make regulations prescribing land for the purposes of subsection (1.1). 2017, c. 8, Sched. 19, s. 7 (2).

Decision

(10) The Assessment Review Board shall hear the appeal and may make any decision that council could have made. 2001, c. 25, s. 357 (10).

Section 364 of the Act provides, in part:

Vacant unit rebate

364 (1) Every local municipality shall have a program to provide tax rebates to owners of property that has vacant portions if that property is in any of the commercial classes or industrial classes, as defined in subsection 308 (1), or in a class prescribed under clause (12) (a.0.1). 2016, c. 37, Sched. 15, s. 12 (1); 2017, c. 8, Sched. 19, s. 8 (1); 2020, c. 36, Sched. 30, s. 2 (1).

Municipal option

(1.1) Despite subsection (1), a local municipality is not required to have a program to provide tax rebates to owners of property that has vacant portions if the local municipality passes a by-law providing that subsection (1) does not apply in the municipality. 2020, c. 36, Sched. 30, s. 2 (2).

Requirements of program

(2) A tax rebate program under this section must meet the following requirements:

1. The program shall apply to eligible property as prescribed by the Minister of Finance for the purposes of this section and as set out in a by-law passed under subsection (2.1).

2. If the property is in any of the commercial classes, the rebate shall be equal to 30 per cent, or such other percentage prescribed by or determined in accordance with the regulations or a by-law passed under subsection (2.1), of the taxes applicable to the eligible property as determined under clause (12) (b).

3. If the property is in any of the industrial classes, the rebate shall be equal to 35 per cent, or such other percentage prescribed by or determined in accordance with the regulations or a by-law passed under subsection (2.1), of the taxes applicable to the eligible property as determined under clause (12) (b).

3.1 If the property is in a class prescribed under clause (12) (a.0.1), the rebate shall be equal to the percentage prescribed by or determined in accordance with the regulations or a by-law passed under subsection (2.1).

4. An application may be made by or on behalf of the owner.

5. The application shall be made to the local municipality by the last day of February of the

Options for municipal by-law

(2.1) A local municipality that has a tax rebate program may, by by-law,

(a) provide for requirements for the program in addition to the requirements under this section, including additional requirements or criteria for a property or portion of a property to be eligible property;

(b) specify circumstances under which no rebate is payable in respect of a property that would otherwise be eligible property; and

(c) specify, for each class in respect of which the rebate applies, a percentage for the rebate for eligible property of up to 35 per cent. 2020, c. 36, Sched. 30, s. 2 (7).

Complaint

(14) A person who has made an application under this section may, within 120 days after the municipality mails the determination of the amount of the rebate, complain to the Assessment Review Board in writing that the amount is too low. 2001, c. 25, s. 364 (14).

Determination by the Board

(16) In a complaint under subsection (14) or (15), the Assessment Review Board shall determine the amount of any rebate owing to the applicant. 2001, c. 25, s. 364 (16).

Interest

(20) The municipality shall pay interest, at the same rate of interest that applies under subsection 257.11 (4) of the Education Act, on the amount of any rebate to which the applicant is entitled under this section if the municipality fails to rebate or credit such amount,

(a) within 120 days after receiving the application or interim application; or

(b) within such other timeline or by such other date as may be prescribed by the Minister of Finance. 2017, c. 34, Sched. 28, s. 2 (10).

With regard to a vacant unit rebate referenced in s.364 of the Act, s.1 of Ontario Regulation 325/01 defines an eligible property as:

Eligible property

1. (0.1) In the event of a conflict between this section and a section of this Regulation that sets out an exemption or special rule with respect to eligible property in a specified municipality, the section that sets out the exemption or special rule prevails. O. Reg. 581/17, s. 2.

(1) A building or structure on property that is classified in one of the commercial classes or industrial classes or in the landfill property class is prescribed to be an eligible property for the purposes of section 364 of the Act for a period of time if,

(a) the period of time is at least 90 consecutive days; and

(b) no portion of the building or structure was used at any time in the period of time. O. Reg. 325/01, s. 1 (1); O. Reg. 300/03, s. 2 (1); O. Reg. 97/17, s. 2 (1).

(2) A portion of a building on property that is classified in one of the commercial classes or in the landfill property class is prescribed to be an eligible property under section 364 of the Act for a period of time if the period of time is at least 90 consecutive days and throughout the period of time,

(a) the portion of the building was not used and was clearly delineated or separated by physical barriers from the portion of the building that was used; and

(b) the portion of the building,

(i) was capable of being leased for immediate occupation,

(ii) was capable of being leased but not for immediate occupation because it was in need of or undergoing repairs or renovations or was under construction, or

(iii) was unfit for occupation. O. Reg. 325/01, s. 1 (2); O. Reg. 300/03, s. 2 (2); O. Reg. 97/17, s. 2 (2).

(3) A portion of a building on property that is classified in one of the industrial classes is prescribed to be an eligible property under section 364 of the Act for a period of time if,

(a) the period of time is at least 90 consecutive days; and

(b) throughout the period of time, the portion of the building was not used and was clearly delineated or separated by physical barriers from the portion of the building that was used. O. Reg. 325/01, s. 1 (3); O. Reg. 300/03, s. 2 (3).

(4) The following rules apply for the purposes of subsections (1), (2) and (3):

1. A reference to a period of at least 90 consecutive days shall be read as a reference to a period of at least 89 consecutive days if the period includes all of February.

2. The following, in the absence of other activity, does not constitute the use of a building or structure or a portion of a building:

i. Construction, repairs or renovations of the building, structure or portion of the building.

ii. The heating, cooling, lighting or cleaning of the building, structure or portion of the building.

iii. The presence of fixtures. O. Reg. 325/01, s. 1 (4).

(5) Despite subsections (1), (2) and (3), a building, structure or portion of a building is not prescribed to be an eligible property under section 364 of the Act for a period of time if,

(a) it is used for commercial, industrial or landfilling activities on a seasonal basis;

(b) it is leased to a tenant who is in possession of the leasehold interest throughout the period of time; or

(c) it is included in a subclass for vacant land under subsection 8 (1) of the Assessment Act throughout the period of time. O. Reg. 325/01, s. 1 (5); O. Reg. 300/03, s. 2 (4); O. Reg. 97/17, s. 2 (3).

(6) Despite subsections (1) and (2), a building or structure or portion of a building is not prescribed to be an eligible property under section 364 of the Act if it is in the resort condominium property class. O. Reg. 210/05, s. 1.

10. Land prescribed under subs. 357 (1.1)

Eligible property described in section 1 is prescribed for the purposes of subsection 357 (1.1) of the Act as land for which no cancellation, reduction or refund of taxes is permitted under clause 357 (1) (g) of the Act. O. Reg. 265/17, s. 2.

1The Rules referenced in this decision are those that were in place at the time the applications/appeals were made to this Board.