Bauman v. Municipal Property Assessment Corporation Region 31, 2021 CanLII 32517

Tribunals Ontario / Tribunaux décisionnels Ontario

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: April 15, 2021

FILE NO.: WR 167693

Assessed Person(s): Martha Martin Bauman and Josiah Brubacher Bauman

Appellant(s): Martha Martin Bauman and Josiah Brubacher Bauman

Respondent(s): Municipal Property Assessment Corporation Region 31

Respondent(s): Township of Plummer Additional

Property Location(s): 442 Boundary Road

Municipality(ies): Township of Plummer Additional

Roll Number(s): 5719-000-004-06500-0000

Appeal Number(s): 3393961, 3411158 and 3449170

Taxation Year(s): 2019, 2020, and 2021

Hearing Event No.: 737566

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

APPEARANCES:

Parties	Representative
Martha Martin Bauman and Josiah Brubacher Bauman	Aaron Martin
Municipal Property Assessment Corporation	Richard Thomas
Township of Plummer Additional	No one appeared

HEARD: December 17, 2020 by telephone conference call

ADJUDICATOR(S): Pierre R. Lavigne, Member

DECISION

OVERVIEW

1This is an appeal of the assessment of the 2019 taxation year classification of the Subject Property. Pursuant to s. 40(26) of the Assessment Act, R.S.O. 1990, c. A.31 (“Act”), the Appellants are deemed to have brought the same appeal in respect of the 2020 and 2021 taxation years.

Background

2In 2011 the Appellants, the Baumans, permitted the construction of a building on their farm for the schooling of the children of their Mennonite religious community. Until 2018 the land was classified in the Residential Property Class. In 2019 the assessor changed the assessment classification of a one-acre portion of the land, used for school purposes, to the Commercial Property Class. During the course of the hearing, Mr. Bauman asked whether there is an exemption or classification that would render the school tax exempt or at least Residential, as it was before 2019.

Areas of Agreement

3The Appellants do not contest the current value of the assessment or the area of the portion used for school purposes, only the classification of the portion of the Subject Property used for a school.

Issues for the Hearing

4At issues in this proceeding are:

1. Whether the Board may exempt the property from taxation.
2. What is the correct classification of the portion of the land used for school purposes?

Result

5The Board has no power to exempt the portion of the property from taxation. The portion of the land used for school purposes is correctly classified as Commercial. Accordingly, the assessments are confirmed as returned for the 2019, 2020 and 2021 taxation years

ANALYSIS

Description of Subject Property

6The Subject Property is a parcel of 46.15 acres of farmland. The land itself is valued at $55,083. On this land are the following buildings; a Type I barn, a Type II barn, 6 Type III barns, a greenhouse and two open top silos. These buildings, with a total gross floor area of 16,904 square feet are valued at $277,818.

7Also, on the land is a 1,323 sq. ft. one-storey schoolhouse, built in 2011, and valued at $117,370. It is the classification of a one-acre portion of land upon which is constructed this schoolhouse and a shelter used for the horse-drawn conveyances the children use to attend school, which is the subject of the classification dispute (the disputed portion).

The Governing Statutory Scheme

8Section 36(1) of the Act requires land to be assessed annually.

9Section 14(1) of the Act describes the information required in the annual assessment. Paragraph 8 of s. 14(1) requires the assessor to include the classification of the land in the annual assessment. The various classes of land are described in Part II of the General Regulation under the Act, O. Reg. 282/98.

10Section 14(5) of the Act states that if portions of a property are classified in different classes, the assessor shall determine the value attributable to each portion.

11Section 40 (1)(a)(iv) provides for appeals to this Board on the basis that the classification of a person’s land is incorrect.

Issue 1 - Can this Board exempt part of the property from taxation?

12Section 3(1) of the Act provides for certain exemptions from taxation. Among these are exemptions which deal with land owned, used and occupied for Public Educational Institutions and Philanthropic Organisations.

13This Board only has the jurisdiction to determine matters authorized by s. 40 of the Act. This includes the classification of land but not whether the land is exempt from taxation. Only the Superior Court may determine matters of exemption from tax under s. 46 of the Act.

Issue 2 - What is the correct classification of the portion of the land used for school purposes?

14Josiah Bauman gave evidence on behalf of the Appellants. He is a minister of the Algoma Orthodox Mennonite religious community. He testified that in 2011 the Appellants donated the use of an acre of their land for the construction of an elementary school for education of the community’s children. The school itself was constructed by the religious community. No conveyance of the land was involved. The Appellants remain the owners of the land and the school. The school is used by the religious community.

15Mr. Bauman testified that the school has been used as an elementary school during the regular school year. The Appellants receive no income from the school’s operation or occupation of their land. The school itself generates no income. The teacher is provided for by the community. No commercial activity takes place at the school.

16There is no dispute that until 2018 the entire land, including the disputed portion, was classified in the Residential Property Class. In 2018 the Appellants received notice that the portion of land, on which the school and shelter were constructed, would be classified as Commercial Property. MPAC asserts that the previous Residential classification had been made in error.

17The Appellants asked, separately from whether the Board could exempt the property from taxation, whether there was a classification similar to a religious or educational exemption or if the portion of land used as a school could be classified as Residential, as it previously had been.

18Classification is based on the use of all or a portion of the land. When the Appellants dispute the classification of the use of a portion of land, the obligation rests on them to establish that the use falls within the correct classification.

19In answer to the Appellants’ question as to whether there is a classification equivalent to a religious or educational exemption, the answer is no. The 15 classifications of land are set out in Part II of the General Regulation O. Reg. 282/98 and do not include any classification that would be similar to such an exemption.

20Though the classifications have titles such as “Residential Property Class”, “Commercial Property Class” and “Farm Property Class”, there are extensive descriptions and rules which govern whether property falls in each individual class. The title of the class does not necessarily describe or characterize all that is included in the class.

21The disputed portion of the land is not used for residential purposes. There was no evidence that anyone resides in the building. It is used as an elementary school.

22Notwithstanding the title of the Residential Property Class, it includes at s. 3(1) paragraph 2 of the General Regulation, the following non-residential uses:

2. Land not used for residential purposes that is,

i. farm land to which subsection 19 (5) of the Act applies for the taxation year for which the land is being classified, other than land in the farm property class or land prescribed under section 44,

ii. land used by a non-profit organization for childcare purposes that is either,

A. land owned by the organization, or

B. land leased by the organization, other than land that would otherwise be in the commercial property class or the industrial property class,

iii. land owned by a religious organization other than land occupied by a tenant and used for a commercial activity,

iv. land owned and occupied by a non-profit service organization, a non-profit private club, a non-profit cultural organization or a non-profit recreational sports club, other than land used as a golf course or ski resort, …. (emphasis added)

23The first question is then: is the disputed portion, on which the school is built, included in sub-paragraph (i) “farm land to which subsection 19 (5) of the Act applies”?

24Subsection 19(5) of the Act provides:

Farmlands 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 “farmlands” and “farm purposes”. 2000, c. 25, s. 5 (1).

25The portion on which the school is situated is not “land used only for farm purposes by the owner”, nor is the “building thereon used solely for farm purposes”, nor is it the “residence of the owner”. It is land and buildings used for school purposes. Accordingly, the land is not “farmland” within the Residential Class as defined by s. 3(1) paragraph 2(i) of the Regulation.

26Nor does the use of the disputed portion fall within paragraphs 2, (iii) or (iv) of the Residential Class section because the land is owned by the Appellants and not a religious organization or a non-profit service organization. Though the Appellant, Joseph Bauman is a minister of his Mennonite community, as an individual minister he cannot be said to be a “religious organization.” An organization implies the agreement of more than one person who co-operate in an association, partnership or corporation for the accomplishment of mutually recognised objects. Though the Algoma Orthodox Mennonite community is a religious organization, it is not the owner of the land and school. It is the authorized user of the property.

27The disputed portion does not fall within the Farm Class as it is not farmland to which subsection 19 (5) of the Act applies (as determined above), which is requirement of s.8(2) paragraph 2 of the General Regulations.

28The Commercial Property class is the default classification. Section 5(1) paragraph 1 of the General Regulations states:

Commercial Property Class

5. (1) The commercial property class consists of the following:

6. Land and vacant land that is not included in any other property class.

29The effect of this section is that, unless one can establish that the land or the portion of the land is in any other property class, it will, by default, be classified in the Commercial Class. This will be the case even if no commercial activity, as commonly understood, is taking place on that portion of the land.

Findings on Issue 2

30As the Appellants have not established that the use of the portion of the land falls within the Residential, Farm Property or any other class, the property is classified, by default, in the Commercial Property Class pursuant to s. 5(1)(i) of the General Regulation.

CONCLUSION

31The Board has no power to grant an exemption of taxation. The Board finds that the classification of the disputed portion upon which the school and shelter are constructed is correctly classified in the Commercial Property Class.

ORDER

32The Board orders that the assessments are confirmed as returned for the 2019, 2020 and 2021 taxation years.