Assessment Review Board

Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 10, 2022

FILE NO.:

WR 169442A

AMENDED DECISION ISSUED:

January 12, 2022

Assessed Person(s):

Magnum Opus Developments (Victoria Park) Corporation

Appellant(s):

JWF Properties

Respondent(s):

Municipal Property Assessment Corporation Region 09

Respondent(s):

City of Toronto

Property Location(s):

1995 Victoria Park Avenue 1973-1991 Victoria Park Avenue

Municipality(ies):

City of Toronto

Roll Number(s):

1901-032-650-00300-0000 1901-032-650-00200-0000

Appeal Number(s):

3182255 and 3183156

Taxation Year(s):

2016

Hearing Event No.:

742427

Legislative Authority:

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

APPEARANCES:

Parties

Counsel

Magnum Opus Developments (Victoria Park) Corporation, JWF Properties

Benjamin Blufarb

Municipal Property Assessment Corporation

Karey Lunau

City of Toronto

No one appeared

HEARD:

March 19, 2021 by video conference

ADJUDICATOR(S):

Joanne Laws, Member

AMENDED DECISION

AMENDED 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 Decision is issued to correct the Board’s initial Order dismissing appeal numbers 3182255 and 3183156 and to identify that the current value of the properties remains to be resolved.

OVERVIEW

1The properties under appeal are two separate parcels of land developed as residential town houses located at 1995 Victoria Park Avenue and 1973-1991 Victoria Park Avenue in the City of Toronto (the “Properties”).

2The Appellant filed appeals with this Board for the 2016 taxation year. The appeals were made pursuant to s. 40 of the Assessment Act, R.S.O. 1990, c.A.31 (the “Act”) for the 2016 taxation year. The Parties are seeking a determination of the correct property class and agree that current value will be addressed after the release of this interim decision. Both Properties were assessed in the multi-residential property class as described in s. 4(1) of Ontario Regulation 282/98 (the “Regulation”), made under the Act.

3The Appellant takes the position that the correct property class is the new multi-residential property class pursuant to s. 10 of the Regulation. The Municipal Property Assessment Corporation (“MPAC”) takes the position that the Properties are correctly assessed in the multi-residential property class.

4The Board’s determination turns on whether renovations to the properties that took place between 2012 and 2014 mean that the units were “built, or converted from a non-residential use, pursuant to a building permit issued”, as required for classification in the new multi-residential property class. Both Parties provided arguments regarding the interpretation of the legislation, together with the scheme of the Act, in support of their positions whether a change in the property class occurred.

Issues for the Hearing

5The issue to be determined is:

Are the Properties’ correct property class multi-residential or new multi-residential pursuant to s. 4 and 10 of the Regulation?

i. Were the units built, pursuant to a building permit issued?

ii. Were the units converted from a non-residential use, pursuant to a building permit issued?

Result

6Pursuant to the Regulation the Board finds that the Properties’ correct property class for the 2016 taxation year is multi-residential.

ANALYSIS

Areas of Agreement and Issues Not in Dispute

7The Parties agree on the Properties’ descriptions as follows:

a. 1995 Victoria Park Avenue is a 2.34-acre parcel of land improved with 36 townhouses (three structures, each with 12 townhouses), built in 1956.

b. 1973-1991 Victoria Park Avenue is a 2.82-acre parcel of land improved with 48 townhouses (four structures, each with 12 townhouses) also built in 1956.

c. The townhouses are a mix of two, three and ‘large three’ bedroom units. The Parties agree on the configuration of the rental units, the number of units and that the mix of sizes was not altered due to the renovations but that there were some alterations to the overall unit sizes.

8The Parties agree that the renovations were extensive and that the Properties were fully vacant from approximately June 2012 to April 2014.

9The evidence is that the building permits were issued on February 29, 2012 and November 15, 2012. For building permits issued before April 20, 2017, the new multi-residential property class applies only if the municipality had a by-law in place opting to have the class apply to the municipality (s. 10(2) of the Regulation). There is no dispute that at the time the building permits were issued the City of Toronto had adopted the new multi-residential property class. The parties also do not dispute that the new multi-residential tax rate is lower than that of multi-residential to encourage new rental housing stock.

Regulation

10Section 1 of the Regulation states:

VACANT LAND

1. (1) The following land, if it is not being used, is vacant land for the purposes of this Regulation:

2. Land that has no buildings or structures on it.

3. Land upon which a building or structure is being built.

4. Land upon which a building or structure has been built if no part of the building or structure has yet been used.

5. Land upon which a building or structure has been built if the building or structure is substantially unusable. O. Reg. 282/98, s. 1 (1).

(2) For greater certainty, any occupation of a building or structure is a use for the purposes of paragraph 3 of subsection (1) and once a building or structure has been occupied the land upon which the building or structure is located cannot be vacant land unless the building or structure becomes substantially unusable. O. Reg. 282/98, s. 1 (2).

(3) A portion of a parcel of land is vacant land for the purposes of this Regulation if,

(a) there is no building or structure on the portion of the parcel or there is a building or structure on the portion but no part of the building or structure has yet been used;

(b) there is a building or structure on the rest of the parcel; and

(c) the portion of the parcel is zoned for a kind of development that is different from the development on the rest of the parcel. O. Reg. 282/98, s.1 (3).

11Section 4 of the Regulation states:

MULTI-RESIDENTIAL PROPERTY CLASS

4. (1) The multi-residential property class consists of the following:

5. Land used for residential purposes that has seven or more self-contained units other than land included in the residential property class under paragraph 1 of subsection 3 (1).

6. Vacant land principally zoned for multi-residential development. O. Reg. 282/98, s. 4 (1); O. Reg. 363/03, s. 3.

(2) Land in the new multi-residential property class is not included in the multi-residential property class. O. Reg. 282/98, s. 4 (2).

12Section 10(2) of the Regulation provides:

NEW MULTI-RESIDENTIAL PROPERTY CLASS

10. (2) The new multi-residential property class consists of land described in paragraph 1 of subsection 4 (1) whose units have been built, or converted from a non-residential use, pursuant to a building permit issued,

(a) on or after April 20, 2017; or

(b) before April 20, 2017, if, at the time at which the permit was issued, a by-law was in force that opted to have the property class apply in the municipality, in accordance with subsection (1) of this section as it read immediately before it was revoked by O. Reg. 264/17. O. Reg. 264/17, s. 1 (2).

Appellant’s Case

13JWF Properties, (the “Appellant”), is a management company for the Assessed Person, Magnum Opus Developments (Victoria Park) Corporation (“Magnum”).

14Jeffrey Feldberg, the principal of Magnum, was called as a fact witness. Magnum purchased the Properties in July 2008 and the sale closed in June 2011. Mr. Feldberg testified that at the time the sale closed the buildings had not been maintained by the vendor and that, in his opinion, they were not fit for human habitation. He testified that, in addition to the lack of maintenance, the copper wiring had been stripped, fixtures and insulation had been removed and some of the units were used for garbage storage. He stated there were 30 units occupied at the time the sale closed. Most of the occupied units were tenanted but some had squatters.

15In 2010 Magnum received conditional approval for an official plan amendment permitting changes to the Properties. The conditional approval included demolishing the existing 84 townhouses and redeveloping the site with three condominium buildings containing 575 units and 86 rental units for a total of 661 residential units. Magnum also made a concurrent application to convert the existing 84 townhomes from rental units to condominiums.

16The redevelopment did not occur nor were the units converted to condominiums. The townhouses underwent extensive renovations beginning in 2012 and re-occupancy was staggered from 2014 through 2016. The renovations did not change the number of rental units but included the removal of interior hallways which allowed for the enlargement of units. Mr. Feldberg testified that the buildings were vacant during the renovations.

17Building permits dated February 29, 2012 and November 15, 2020 were submitted into evidence. They specified the work as: “Additions/Alterations; Apartment Building Interior Alterations” and that the scope of the work was “renovations”. The Appellant argues that the work done was not renovations, but new construction as reflected by the time taken and the extent of the work. The Appellant further argues that the wording used by the City of Toronto on its building permits was not in the Appellant’s control and ought not be used in determining the Properties’ correct class.

18The Appellant takes the position that for the 2016 taxation year, the Properties’ correct class is new multi-residential pursuant to the provisions in s. 10 of the Regulation for the following reasons:

1. The units were in the vacant property class from 2012 to 2014 because they were not fit for habitation and, specifically, from June 2012 to April 2014 they were vacant while the units underwent extensive renovations.

2. The extensive renovations created newly built units because, although the units were not demolished, the renovations were sufficiently extensive including modifications to the interiors, removal of common interior hallways and some external entries, and, the unit sizes were enlarged.

3. The Properties’ correct class during renovations was vacant land, and, when they began being occupied in June 2014 they were converted from a non-residential use.

19There is an office area for the Properties which was used for property management purposes before and after the renovations and, in between, was used to oversee the renovations and to market the rental units. The Appellant argues the office’s property class was converted from commercial during the renovations to new multi-residential once it reverted back to a property management office.

MPAC’s Case

20MPAC does not dispute that the Properties underwent extensive renovations but takes the position that they do not meet the requirements for the new multi-residential property class as defined in s. 10 of the Regulation.

21MPAC argues that the vacancy during the renovations does not trigger a change in property class, that the residential units in the Properties were not built nor were they, or the office area, converted from a non-residential use, pursuant to a building permit issued.

ANALYSIS AND FINDINGS

22For the following reasons the Board finds that for the 2016 taxation year the correct property class for both Properties is multi-residential.

23To determine the Properties’ correct property class the Board must determine the intention of the legislator and the context and purpose of the legislation in order to guide its reading of the Regulation. In Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 at paras. 117-124 the Supreme Court of Canada clarified that a tribunal’s interpretation of legislation must be consistent with its “text, context and purpose”, referencing page 87 of Elmer Driedger's Construction of Statutes (2nd ed. 1983), which states:

Today there is only one principle or approach, namely, the words of an Act are to 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.

24Driedger's modern approach has been repeatedly cited as the preferred approach to statutory interpretation in numerous decisions, including Québec (Communauté urbaine) v. Corp. Notre-Dame de Bon-Secours, 1994 CanLII 58 (SCC), [1994] 3 SCR 3 (“Notre Dame”). The overall scheme of the Act and the Regulation is to correctly assess properties. The correct assessment includes the correct property class.

25In interpreting a statute, the Board must determine the legislator’s intention. The words of a statute are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the statute, the object of the statute and the intention of the legislature: Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), [1998] 1 SCR. 27 (“Rizzo”) at paras. 20-23 and Bell at paras. 26-28 and only if there is ambiguity, not resolved by the ordinary rules of interpretation, will the interpretation be settled in favour to the taxpayer: Notre Dame.

26Section 10 of the Regulation provides that “[the] new multi-residential property class consists of land … whose units have been built, or converted from a non-residential use, pursuant to a building permit issued”. The words “consist of” are finite words which, in the Board’s view, cannot be interpreted as including more than “built, or converted from a non-residential use”. Further, the requirement to qualify in the new multi-residential property class is limited by the words “pursuant to a building permit issued”.

Were the units built?

27In relation to the word “built” in s. 10 of the Regulation, the Board finds that the renovations to the units do not satisfy the requirements for a new multi-residential class.

28The purpose of the new multi-residential property class is to encourage new rental housing stock within a municipality by providing an advantageously lower tax rate than that of the multi-residential property class. The number of rental units did not increase but remained the same as before the renovations.

29In considering the meaning of the word “built” the Board is guided by Yonge Street Hotels Ltd. v. Municipal Property Assessment Corp., Region No. 9, 2005 CanLII 14438 (“Yonge”) and Trivest Developments Ltd. et al. and City of Toronto, 1986 CanLII 2754 (ON SC) (“Trivest). In both decisions the courts found that the properties subject to those decisions did not qualify as new buildings despite having undergone extensive interior renovations and where there were no alterations to the foundations and exterior walls. Those properties were described as being in a poor state of repair and both were, in essence, gutted for the purpose of the renovations and retrofits. In Yonge, the units were reconfigured including unit sizes.

30The circumstances in Young and Trivest differ from these appeals in that Yonge was a determination of whether the property qualified for a frozen assessment scheme and in Trivest whether a demolition permit was required for extensive renovations. However, the facts in both cases as outlined above were similar to the subject appeals.

31In Trivest the Court noted that “If all renovations and alterations were intended to be covered by the word “demolition” which has a plain meaning in all dictionaries, it was incumbent upon the Legislature to redefine that word to accord with its intention”. The Board agrees with the Court’s determination in Trivest. Had the legislature intended renovations to be covered by the word “built” it would have defined “that word to accord with its intention”.

32The Appellant argues that it does not have control over the wording used by the City of Toronto in its building permits. However, the Appellant brought no evidence that the wording was incorrect or misleading. The wording used in the building permits does not indicate that the units were built, only that they were renovated. This is consistent with the evidence presented by the Appellant. The number of units, the exterior structure and the foundations were not altered.

33There is no ambiguity in the permits’ wording. It is consistent and clear: “Additions/Alterations; Apartment Building Interior Alterations” and that the scope of the work was “renovations”. None of the building permits submitted include wording that indicates the units were built, only that the existing units were renovated (Rizzo and Bell).

34Based on the above the Board finds that the units were not built, pursuant to a building permit issued at the relevant time.

Were the units converted from a non-residential use?

35The Appellant argues that the Properties’ class was converted from vacant land to the new multi-residential once the renovations were complete.

36There is no dispute that the Properties were used for residential purposes prior to the renovations which began in 2012 and, despite the poor physical conditions, a number of units were used for residential purposes directly before the renovations began. The units were rented from 2014 through 2016.

37The test is not whether the land qualified as vacant land but whether the land was converted from a non-residential use to a residential use pursuant to a building permit issued (emphasis added). There is no ambiguity in the wording of the building permits. The scope of the work permitted was interior renovations to an apartment building. Nothing indicates that the renovations were to a property that had a non-residential use. As the vacancy itself resulted from the renovations conducted pursuant to the building permits, it cannot be said that there was a conversion to residential use pursuant to those permits. The inclusion of “pursuant to a building permit issued” in s. 10 of the Regulation indicates that the legislator’s intent and purpose was not to include residential properties to be renovated and returned to the rental stock but to increase the rental stock.

38The office area is not mentioned in the building permits. Section 10 specifically addresses the “units” of the land. The office has not been defined as a unit, but the evidence is that it was and is used to support the Properties’ day-to-day functions. The Board does not consider the office area to be relevant one way or the other to whether the Properties fall in the new multi-residential property class pursuant to s. 10 of the Regulation.

39However, even if the office area was a “unit” within the meaning of s. 10, the Board would find that it was not converted from a non-residential use pursuant to a building permit issued. As noted above, the evidence is that the office was used for the day-to-day administration of the Properties: property management prior to and after the renovations and in between to manage the renovations and market the renovated units.

CONCLUSION

40The Board concludes that the Properties are not eligible properties for the new multi-residential property class as defined in s. 10 of the Regulation and that the multi-residential property class is correct pursuant to s. 4. The buildings were not newly built nor were the existing buildings, including the office area, converted from a non-residential use, pursuant to a building permit issued.

41The legislator contemplated the scope of qualifying for the new multi-residential property class, clearly setting out the confines for eligibility. The Board finds there is no ambiguity in the wording used in s. 10 of the Regulation.

42At para. 24 in Yonge the court stated “… it is our job to interpret the legislation that the legislature has enacted. We are not at liberty to overcome or ignore the legislative distinctions by applying some free-standing principle of fairness. The fairness and equity… is extended only to “eligible properties”. The Board “… cannot ignore, obliterate, or refuse to apply the language chosen by the legislature.” The wording used in the building permits does not exceed the ordinary meaning of the word “built” or the words “converted from a non-residential use”.

ORDER

43The Properties’ correct property class for the 2016 taxation year is multi-residential.

44The Parties are directed to complete calculations of the Properties’ current value for the 2016 taxation year by way of Minutes of Settlement.

45The Minutes of Settlement shall be produced and submitted to this Board in accordance with the Board’s Rules of Practice and Procedure, as applicable, except that the time requirements indicated for drafting the Minutes of Settlement shall begin on the date this interim decision is issued.

46If the Parties are unable to reach an agreement regarding the current value, they are to advise the Board, in writing, within 45 days of the release of this interim decision. The Board will then convene a hearing on the issue of current value.

47I am seized.