Tribunals Ontario
Assessment Review Board
ISSUE DATE: April 28, 2022
FILE NO.: DM 177894AA
AMENDED MOTION DECISION ISSUED: May 3, 2022 and August 30, 2023
Assessed Person: Cypriot Homes Association
Appellants: City of Kitchener; Greg Demacio
Respondent: Municipal Property Assessment Corporation Region 21
Respondent: City of Kitchener
Property Location: 695 Strasburg Road
Municipality: City of Kitchener
Roll Number: 3012-040-027-19540-0000
Appeal Numbers: 3412885, 3412886, 3462560 and 3489878
Taxation Years: 2019, 2020, 2021 and 2022
Hearing Event No.: 764664
Legislative Authority: Sections 32 and 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
| Parties | Counsel*/Representative |
|---|---|
| Cypriot Homes Association | Tim Sullivan |
| City of Kitchener; Greg Demacio | Amboka Wameyo |
| Municipal Property Assessment Corporation | Allyson Amster*, Matthew Kanter* |
REQUEST FOR: A determination on jurisdiction and to prohibit the raising of an issue in the appeals
HEARD: April 7, 2022 in writing
ADJUDICATOR: Jean-Paul Pilon, Member
AMENDED MOTION DECISION
In accordance with Rule 99 of the Assessment Review Board’s Rules of Practice and Procedure, effective April 1, 2021, related to the correction of minor errors and in accordance with Rule 21.1 of the Statutory Powers and Procedure Act regarding the correction of errors, this Amended Motion Decision is issued to identify the representatives for MPAC as counsel in the Appearances section on page 1. The amendments have been underlined for ease of reference. There are no other changes in this Amended Motion Decision. Due to Member Pilon no longer being a Member of the Assessment Review Board, this Amended Motion Decision is issued by Associate Chair Ken Bednarek.
OVERVIEW
1This motion was brought by the Municipal Property Assessment Corporation (“MPAC”) in appeals concerning a property at 695 Strasburg Road in Kitchener (the “Subject Property”).
2In this motion, MPAC requested two forms of relief: first, a determination that the Assessment Review Board (the “Board”) does not have jurisdiction to determine the tax liability of the Subject Property, and second, an order prohibiting the appellant, the City of Kitchener (the “City”), from raising tax liability as an issue in its appeals.
3The owner of the Subject Property, Cypriot Homes Association, adopted MPAC’s position in the motion.
Result
4MPAC’s motion is granted. The Board confirms that it does not have jurisdiction to determine tax liability of the Subject Property and prohibits the City from raising tax liability as an issue in these appeals.
Background
5MPAC filed the single affidavit that provided the factual background for this motion. Affirmed remotely by MPAC employee Tim Vollmar on March 21, 2022, it set out that in 2019, MPAC determined that the Subject Property should be exempt from taxation pursuant to section 3 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”). The City appealed that assessment, and further annual appeals were deemed up to and including for the 2022 taxation year pursuant to section 40(26) of the Act.
6MPAC’s submission in the motion made two basic points: that the Board does not have jurisdiction to determine tax liability and that tax liability is not the same as classification. Those two points are restated below as issues to be determined in this motion.
ANALYSIS
Issue 1 – The Board’s jurisdiction to determine tax liability
7MPAC’s first point in its motion was that the Board does not have jurisdiction to determine tax liability. The City responded saying that the City’s Statement of Issues (“SOI”) did not mention tax liability and that the question of the Board’s jurisdiction only arose in MPAC’s motion material. The Board assumes this to mean that the City took no issue with the point.
8MPAC is correct that the Board lacks jurisdiction to determine whether a property or a portion thereof is exempt from taxation. This is because section 40(1) of the Act, which sets out potential grounds for appeal to the Board, does not include exemption as one of those potential grounds of appeal. Further, sections 46(1) and 46(1.1) of the Act provide that an application can be made to the Superior Court for issues relating to an assessment that could not have been the subject of an appeal before the Board, and exemption from taxation would have been one of those issues.
9This was confirmed in the Board’s review decision North America Railway Hall of Fame v Municipal Property Assessment Corporation Region 23, 2016 CanLII 14708 at para. 15, which, in turn, cited a number of precedents to support it. More recently, the Board made the same determination in: Wilson v Municipal Property Assessment Corporation, Region 01, 2021 CanLII 44050 (“Wilson”) at para. 20, 2469824 Ontario Inc. v Municipal Property Assessment Corporation, Region 05, 2021 CanLII 46454 at para. 14, and in Jagannath Temple (A Place of Hindu Worship) v Municipal Property Assessment Corporation, Region 15, 2020 CanLII 97409 at para. 34, where leave to appeal was denied by the Divisional Court in Mishra v Municipal Assessment Corporation, Region 15, 2021 ONSC 2937.
Finding on Issue 1
10It is settled law that the Board does not have jurisdiction to consider tax liability or exemption.
Issue 2 – Tax Liability versus Classification
11MPAC’s section point was that tax liability is not the same as taxation.
12Section 3(1) of the Act provides that all real property in Ontario is subject to assessment and taxation. Following that is a long list of exemptions not within the Board’s authority to determine. MPAC argued, correctly, that the Board has jurisdiction to determine classification of real property, which property classes and subclasses are set out in sections 7 and 8 of the Act, and that those sections make no mention of exemption.
13MPAC argued the difference between classification and exemption was clarified in Racco v Municipality Property Assessment Corporation Region 14, 2020 CanLII 1383 at para. 15, where the Board determined in a motion brought by MPAC that it did not have jurisdiction to consider an appellant’s attempt to exempt a property from taxation that had been returned in the commercial property class. MPAC further argued that the point was made even clearer in Wilson at para. 26, which property classes determined that “tax classification (as in exemption) and property classification are not the same thing.”
14In its response to the motion, the City argued that it raised only two issues in its SOI, current value and classification, which Rule 43 of the Board’s Rules of Practice and Procedure allowed it to raise.
15Further, the City relied on the Board’s decision London (City) v 8768013 Canada Ltd., 2016 CanLII 19402 (“London”) in both its SOI and in its response to the motion as analogous to the circumstances before the Board in this motion.
16In that decision, the Board determined that classification was an issue before it in appeals involving a place of worship that had been exempt from taxation prior to a transfer from a religious organization to a numbered company. The City argued that this decision “shows that the (Board) has jurisdiction over cases brought by municipalities seeking determination of the appropriate tax class for properties under appeal.” The City also noted in its submission that MPAC supported the municipality’s request in London revising the assessment from an exempt place of worship to the commercial property class, and that this decision was not appealed.
Findings on Issue 2
SOI
17The City is correct that Rule 43(c) allowed it to raise classification as an issue in its SOI. This is essentially a restatement of section 40(1)(a)(iv) of the Act which provides the right to appeal to the Board if “the classification of the person’s land…is incorrect.”
18The City’s SOI reproduced MPAC’s Amended Property Assessment Notice for the Subject Property which was made pursuant to section 32(1) of the Act. This showed an assessed value for the Subject Property but no classification. In place of any classification on MPAC’s form was an indication that that the Subject Property was exempt where it had previously been in the new multi-residential property class.
19The absence of any indication as to classification was likely because section 32(3) of the Act, which sets out rules if land has been entered on the tax roll as exempt from taxation, makes no mention to classification and only requires MPAC to return an assessed value. It did not require MPAC to classify the Subject Property when it determined that it should be exempt from tax.
20In its motion material, the City did not explain the significance of classification where the Subject Property was returned as exempt and no tax would have been payable. In its SOI however, the City’s position was outlined as being that that the Subject Property should have been classified in the multi-residential property class because of the use and occupation of the Subject Property. It then set out comparable properties with the same classification, presumably on the assumption this would be a live issue before the Board.
21The only logical conclusion on this point is that the City’s intention in pursuing classification as an issue in the face of a returned exemption was to circumvent the limitation on the Board’s authority and to avoid having to go to the Superior Court. It was effectively an attempt to achieve indirectly what could not have been done directly.
The London Decision
22On the issue of classification, London considered section 3(1) of the Act which exempts from taxation “land that is owned by a church or religious organization.” That decision said at para. 37 that “the Board agrees with the City’s submission; that the property ceased to have an exempt status which it was purchased by 8768013, which is neither a charitable organization nor a church or religious organization.”
23MPAC’s position was that London was both wrongly decided and distinguishable because MPAC agreed that the property in that case should be taxable whereas here it did not. In its submission, the City argued that London was analogous to the situation before the Board in this motion.
24It is doubtful that that the Board’s decision in London is correct when it considered exemption in those circumstances. However, beyond debate for the reasons above is that the Board does not have the jurisdiction to determine exemption. In addition, while the Board strives for consistency in its decisions, it is not required to follow its own decisions, particularly if it subsequently determines that they are incorrect.
25In this case, the Subject Property was returned as exempt by MPAC and the City is challenging that exemption. The Board finds that it is not open to the City to pursue that issue by challenging classification at the Board because the returned exemption has made the issue of classification moot and effectively irrelevant. It would circumvent the limitations on the Board’s authority set out in the Act.
Remedies
26As to remedies, MPAC requested an order prohibiting the City from raising tax liability as an issue in the appeals. The City argued that it was simply challenging the classification of the Subject Property as it was entitled to do, but the Board does not agree. It instead finds that the City’s real intention was to challenge the exemption which the Board does not have the authority to consider.
27MPAC indicated that its purpose in requesting relief was to narrow the issues in the appeals. The Board concurs that there would be no point for the City to be permitted to continue to pursue its challenge to the classification of the Subject Property while it remains exempt where the jurisdiction to determine exemption resides entirely with the Superior Court.
CONCLUSION
28The Board finds that MPAC should be successful in its motion and that it would be appropriate to grant the relief requested.
ORDER
29The Board orders that it does not have the jurisdiction to determine the tax liability of the Subject Property and that the City of Kitchener is prohibited from raising tax liability through its argument on classification in the appeals before the Board.
"Ken Bednarek"
KEN BEDNAREK ASSOCIATE CHAIR Assessment Review Board
Website: www.tribunalsontario.ca/arb