SBA Communication Corporation v. Municipal Property Assessment Corporation, 2022 CanLII 48460

Tribunals Ontario Tribunaux décisionnels Ontario Assessment Review Board Commission de révision de l’évaluation foncière

ISSUE DATE: June 2, 2022

FILE NO.: DM 169895

Assessed Person(s): See Schedule A

Appellant(s): SBA Communication Corporation

Respondent(s): Municipal Property Assessment Corporation Regions 16, 18, 23 and 26, the Municipalities and the Assessed Persons

Property Location(s): See Schedule A

Municipality(ies): See Schedule A

Roll Number(s): See Schedule A

Appeal Number(s): See Schedule A

Taxation Year(s): 2020 (and 2021 and 2022 deemed)

Hearing Event No.: 742406

Legislative Authority: Rule 24(c) of the Assessment Review Board’s Rules of Practice and Procedure

Parties	Representative
SBA Communications Corporation	Chantelle MacMillan
Municipal Property Assessment Corporation	Charmaine Siddle Damian Bernacik, student-at-law
Municipalities	Submissions not received

REQUEST FOR: Dismissal of Appeals

HEARD: April 8, 2021 in writing

ADJUDICATOR(S): Dirk VanderBent, Vice-Chair

MOTION DECISION

OVERVIEW

1SBA Communications Corporation (the “Appellant”) filed appeals for the 2020 taxation year pursuant to s. 40 of the Assessment Act, RSO 1990 c. A.31, as amended (the “Act”) with the Assessment Review Board (“the Board”) for the properties listed in the above Title of Proceedings (“the Subject Properties”). The Municipal Property Assessment Corporation (“MPAC”), the Municipalities and the owners of the Subject Properties are the respondents to the appeals.

2In accordance with s. 40(26) there are deemed appeals for the 2021 and 2022 taxation years.

3The only issue that the Appellant has raised in each of these appeal proceedings is whether the Appellant’s communication towers located on the Subject Properties should be exempt from taxation pursuant to s. 3(1) (21) of the Act which states:

3 (1) All real property in Ontario is liable to assessment and taxation, subject to the following exemptions from taxation:

21. All the machinery, plant and appliances, wherever situate, and all structures placed on, over, under or affixed to any highway, lane or other public communication, public place or water so long as the machinery, plant, appliances or structures are used by any telephone or telegraph company in connection with and as part of the operations of its telephone or telegraph business, ...

For ease of reference, “exemption status” refers to whether or not a property is exempt from taxation.

4In returning the Assessment Rolls for the 2020 taxation year pursuant to s. 36 of the Act, MPAC reports that no parts of the Subject Properties are exempt from taxation, and that the Subject Properties are classified in the Commercial Property Class. The Appellant maintains that the communication towers are exempt from taxation, framing the issue as “the communication tower on each of the Subject Properties is classified as commercial when it should, instead, be classified as exempt.”

5To better understand the Appellant’s position, it is necessary to explain that under the provisions of municipal legislation (the Municipal Act, 2001, S.O. 2001, c. 25 and the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A), the arithmetic formula for calculating the amount of tax to be levied, is a property’s value multiplied by the applicable tax rate, where the applicable tax rate is based on the property’s classification. In this case, if the telecommunication tower is exempt from taxation, then the value of the tower will be excluded from the current value of the property, resulting in a reduction in the amount of municipal tax payable.

6In this case, if the telecommunication towers are not exempt from taxation, the Appellant agrees that the current value of the Subject Properties reported by MPAC is correct.

7To better understand the issue in dispute, it is also necessary to briefly describe an aspect of constitutional law. Canada’s constitution provides for the division of jurisdictional powers between the federal and provincial governments. Under this division of powers, the federal government has jurisdiction over the levying of taxation. Therefore, only a federally constituted court or tribunal has the jurisdiction to determine whether land is liable to taxation. In Ontario, this court is the Superior Court of Justice (see Toronto (City) v. Olympia Edward Recreation Club Ltd., 1955 CanLII 11 (SCC), [1955] SCR 454 at 457-458).

8While the Appellant acknowledges that the Board does not have jurisdiction to determine whether land is liable to taxation, the Appellant advances a more nuanced argument. The Appellant observes that, in Bell Canada v. Bentinck (Township), 1987 CarswellOnt 1818, (“Bentinck”), the Superior Court ruled that a telecommunication tower does qualify for exemption from taxation pursuant to s. 3(1) (21) of the Act. Therefore, the Appellant argues that the Board, in an appeal proceeding commenced pursuant to s. 40 of the Act, does have the jurisdiction to interpret and apply the finding of the Superior Court in Bentinck to the telecommunication towers situated on the Subject Properties. In other words, the Board does have jurisdiction to rule on the exemption status of the Subject Properties.

9Alternatively, the Appellant points that the permitted grounds of appeal listed in s. 40 of the Act include whether “the classification of the person’s land or another person’s land is incorrect.” The Appellant argues that property “classification” includes exemption status, and, consequently, the Board has jurisdiction to determine the exemption status of the Subject Properties.

10The Appellant also states that MPAC has assessed Bell Canada’s telecommunication towers as exempt from taxation and argues that this has the effect of providing a pecuniary advantage to Bell Canada over competing companies whose towers have not been similarly assessed.

11MPAC disagrees with all of the Appellant’s arguments, and has brought a Motion requesting that the Board dismiss the appeals, on the grounds that:

i. The Board does not have jurisdiction to determine whether the Subject Properties are exempt from taxation, as this is not a ground of appeal permitted under s. 40(1) of the Act, and, in this regard, the term “classification” as defined in the Act, does not include exemption status.

ii. Regarding the issue of equity, the Board’s sole jurisdiction to grant equitable relief is provided in s. 44(3)(b) of the Act, which applies only to the determination of current value, not exemption status or classification.

iii. As the Appellant has not raised any other issue in this appeal proceeding that the Board has jurisdiction to address, the Appellant’s appeals should be dismissed.

12The Appellant opposes MPAC's request to dismiss the appeals, asserting the issues raised by the Appellant should be determined in a hearing before the Board. None of the municipalities have provided submissions on this Motion.

RESULT

13The Motion is granted. Under the Act, “classification” does not include exemption status. As exemption status is not one of the enumerated grounds of appeal under s. 40 of the Act, the Board does not have the jurisdiction to determine whether a property is exempt from taxation under s. 3(1) of the Act. The Board does not have general jurisdiction to grant equitable relief, and s. 44(3)(b) of the Act only applies to the determination of current value, not exemption status. Consequently, as the Appellant’s appeals do not disclose any apparent statutory ground on which the Board can make a decision, the appeals are dismissed.

ISSUES

14The Issues to be addressed in this Motion Decision are:

1. Does “classification” as defined in s. 1(1) and s. 7 of the Act include “exemptions from taxation” under s. 3(1) of the Act?

2. Does the Board have jurisdiction to determine whether land is exempt from taxation under s. 3(1) of the Act?

3. Does the Board have jurisdiction to grant an exemption from taxation based on equity?

4. Should the Board dismiss the appeal proceedings respecting the Subject Properties for the 2020 to 2022 taxation years?

15While the Board has reviewed all the parties’ submissions in detail, for purposes of this Motion Decision, the Board provides a synopsis of only the most salient submissions. In this regard, the Board observes that most of the salient submissions have been summarized in the Overview above.

ANALYSIS

Issue 1: Does “classification” as defined in s. 1(1) and s. 7 of the Act include “exemptions from taxation” under s. 3(1) of the Act?

Relevant Legislation

16Section 1(1) of the Act:

“classification” means a determination of the class or subclass of real property that land is in, including a class of property prescribed under clause 257.12 (1) (a) of the Education Act, and “classified” has a corresponding meaning;

17Section 3(1) of the Act:

3 (1) All real property in Ontario is liable to assessment and taxation, subject to the following exemptions from taxation:

18Sections 7(1) and (2) of the Act:

Property classes

7 (1) The Minister shall prescribe classes of real property for the purposes of this Act. 1997.

Same

(2) The classes prescribed by the Minister shall include, but are not restricted to, the following:

1. The residential property class.

2. The multi-residential property class.

3. The commercial property class.

4. The industrial property class.

5. The pipe line property class.

6. The farm property class.

7. The managed forests property class.

19Section 14(1) of the Act:

14 (1) The assessment corporation shall prepare an assessment roll for each municipality, for each locality and for non-municipal territory and the assessment roll shall contain the following information as well as the information required under subsections (1.1) and (1.2):

5. The current value of the land.

6. The value of the land liable to taxation.

7. The value of land exempt from taxation.

8. The classification of the land.

Findings on Issue 1

20In accordance with accepted principles of statutory interpretation, the Board must interpret the wording of the sections of the Act based on their plain and ordinary meaning in a manner consistent with the overall purpose of the Act. Regarding the purpose of the Act, it can be presumed that the Legislature, in enacting this legislation, was aware of the constitutional limits on its jurisdiction. The above referenced sections of the Act, make it abundantly clear that a property’s classification is a separate and distinct concept from its exemption status. In particular, s. 7 of the Act provides an exhaustive list of the specific property classes. Had the Legislature intended that exemption status would be one of those property classes, it would have listed exemption status as a property class in s. 7.

21In reaching this conclusion, the Board has considered the Appellant’s submission citing Toronto (City) v. Municipal Property Assessment Corporation, 2013 ONSC 6137 (“Toronto City”). The Appellant submits that the courts use the words “classification” and “exemption” in conjunction and interchangeably. In this regard, the Appellant cites paragraph 63 of the Court’s decision:

The City also referred to Charron v. MPAC Corp, Region No. 1, [2006] O.A.R.B.D. No. 8.According to the facts recited in the ARB’s decision, MPAC changed the classification of the subject property from exempt to commercial in 2002 and delivered an omitted assessment notice in which it provided a current value assessment based on an income approach valuation.

The Appellant also cites a decision of the Board in White v Municipal Property Assessment Corporation, Region 06, 2019 CanLII 5474 (ON ARB) (“White”).

22In addressing this submission, the Board notes that the Court in Toronto City, merely quoted what was stated in a Board decision. The Court, itself, did not use the terms interchangeably in its decision. In fact, the Court stated at paragraph 18:

Property is either taxable or exempt. Unless an exemption applies, all property is assessable and taxable.

23In further addressing this submission, the Board first reiterates that, when calculating the amount of tax to be levied, the applicable tax rate is based on a property’s classification. Where a property is exempt from taxation, it is unnecessary to calculate the amount of taxes payable, in which case the property’s classification is no longer relevant. Consequently, the Board finds that the statement that a property’s classification may change ‘from commercial to exempt’ is simply an imprecise way of saying that when a property becomes exempt from taxation, its classification is no longer relevant. It does not suggest that exemption status is synonymous with property classification.

24For the above reasons, the Board finds that property “classification” does not include exemption status.

Issue 2: Does the Board have jurisdiction to determine whether land is exempt from taxation under s. 3(1) of the Act?

Relevant Legislation

25Section 40 the Act states:

40 (1) Any person, including a municipality, a school board or, in the case of land in non-municipal territory, the Minister, may appeal in writing to the Assessment Review Board,

(a) on the basis that,

(i) the current value of the person’s land or another person’s land is incorrect,

(ii) the person or another person was wrongly placed on or omitted from the assessment roll,

(iii) the person or another person was wrongly placed on or omitted from the roll in respect of school support,

(iv) the classification of the person’s land or another person’s land is incorrect, or

(v) for land, portions of which are in different classes of real property, the determination of the share of the value of the land that is attributable to each class is incorrect; or

(b) on such other basis as the Minister may prescribe.

Note: The Minister has not prescribed that the exemption status of a person’s land is a ground of appeal under s. 40(1).

Findings on Issue 2

26The Board first observes that the submissions of the parties have been adequately reported in the Overview above.

27Although not expressly stated in the Appellant’s submission that the Board can apply Bentinck in the circumstances of this case, the underlying rationale is that the Superior Court has already exercised its exclusive constitutional authority to determine this exemption issue. Therefore, the Appellant’s submission is, in effect, that the Board would simply be applying the Court’s ruling, and, consequently, in doing so, the Board would not usurp the Court’s constitutional jurisdiction. However, in applying the Court’s ruling, the Board must make a decision whether the towers in this case are the same type of towers considered by the Court in Bentinck. Therefore, the counter argument is that the Board would be making its own decision whether the towers in this case are exempt, which would usurp the Court’s constitutional jurisdiction.

28This is an interesting issue. However, for the following reasons, the Board finds that it is unnecessary to address this issue, because the Act, itself, does not grant the Board the jurisdiction to adjudicate disputes regarding exemption status.

29The Board notes that, as an administrative tribunal, the Board can only exercise the jurisdiction granted to it under its enabling legislation, namely, the Assessment Review Board Act, R.S.O. 1990, c. A.32 (“the ARB Act”), and the Act. Under this legislation, the Board’s only jurisdiction, as it relates to this case, is its jurisdiction to hear appeals in accordance with s. 40(1) of the Act. As MPAC has correctly pointed out, the permitted grounds of appeal under the Act do not include whether a property’s exemption status is incorrect.

30Since the Board does not have the jurisdiction to address the exemption issue, it follows that the Board does not have the jurisdiction to consider the Appellant’s argument that the Board can interpret and apply the decision of the Superior Court in Bentinck.

31Regarding the issue of classification, this is a ground of appeal under s. 40(1), but the Board has already found that “classification” does not include exemption status.

32Accordingly, the Board finds that it does not have the jurisdiction to adjudicate disputes respecting exemption status. As MPAC has pointed out in its submissions, the Appellant must submit an application to the Superior Court of Justice pursuant s. 46 of the Act to address this issue.

Issue 3: Does the Board have jurisdiction to grant an exemption from taxation based on equity?

Findings on Issue 3

33As noted above, the Board, as an administrative tribunal, can only exercise the jurisdiction granted to it under its enabling legislation. Therefore, the Board has no general jurisdiction to grant equitable relief. Under s. 44(3)(b) of the Act, the Board may reduce a property’s correct current value to make it equitable with similar properties in the vicinity. However, as MPAC has pointed out in its submissions, this jurisdiction relates only to the determination of a property’s current value, which, under the Act, is a separate and distinct concept from exemption status. Furthermore, the Board can only exercise its jurisdiction under s. 43(3)(b) in appeal proceeding under s. 40(1) where the Appellant asserts that the current value of the person’s land is incorrect. In this case, the Appellant has acknowledged that it does not claim that the current value of the Subject Towers is incorrect. Consequently, s. 44(3)(b) does not apply in the circumstances of this case.

34For these reasons, the Board finds that it does not have the jurisdiction to grant an exemption from taxation based on equity.

Issue 4: Should the Board dismiss the appeal proceedings respecting the Subject Properties for the 2020 to 2022 taxation years?

Relevant Rule

35Rule 24(c) states:

Dismissal of a Proceeding

24. The Board may dismiss a proceeding without holding a hearing, or after a hearing, if:

(c) the Board is of the opinion that the reasons set out in the appeal do not disclose any apparent statutory ground on which the Board can make a decision;

Findings on Issue 4

36The Appellant agrees that the only issue raised in the appeal proceedings respecting the Subject Properties for the 2020 to 2022 taxation years is whether the telecommunication towers are exempt from taxation. The Board has ruled that it does not have jurisdiction to address this issue. Accordingly, the Board finds that the reasons set out in the appeal do not disclose any apparent statutory ground on which the Board can make a decision. For this reason, the Board dismisses the appeals without holding a hearing.

ORDER

37MPAC's Motion is granted. The appeals filed in respect of the Subject Properties for the 2020 to 2022 taxation years are dismissed.

"Dirk VanderBent"

DIRK VANDERBENT VICE-CHAIR Assessment Review Board Website: www.tribunalsontario.ca/arb

DM 169895

SCHEDULE A

Assessed Persons/ Respondents	Appellant	Property Location	Municipality /Respondents	Roll No.	Appeal No.	Taxation Year
Theodore Donker, Jacoba Donker	SBA Communication Corporation	3056 Pigram Line	Township of South-West Oxford	3211-010-020-02800	3412688	2020
Theodore Donker, Jacoba Donker	SBA Communication Corporation	3056 Pigram Line	Township of South-West Oxford	3211-010-020-02800	3448448	2021
Theodore Donker, Jacoba Donker	SBA Communication Corporation	3056 Pigram Line	Township of South-West Oxford	3211-010-020-02800	3490258	2022
D & C Parker Recreation Ltd.	SBA Communication Corporation	18254 Kent Bridge Road	Municipality of Chatham-Kent	3650-140-004-45300	3412690	2020
D & C Parker Recreation Ltd.	SBA Communication Corporation	18254 Kent Bridge Road	Municipality of Chatham-Kent	3650-140-004-45300	3448636	2021
D & C Parker Recreation Ltd.	SBA Communication Corporation	18254 Kent Bridge Road	Municipality of Chatham-Kent	3650-140-004-45300	3490383	2022
George Smallman, Barbara Smallman	SBA Communication Corporation	4860 White Oak Road	City of London	3936-080-040-10300	3412713	2020
George Smallman, Barbara Smallman	SBA Communication Corporation	4860 White Oak Road	City of London	3936-080-040-10300	3448278	2021
George Smallman, Barbara Smallman	SBA Communication Corporation	4860 White Oak Road	City of London	3936-080-040-10300	3490218	2022
East Bertie Auxiliary Volunt	SBA Communication Corporation	1015 Dominion Road	Town of Fort Erie	2703-020-008-27200	3412659	2020
East Bertie Auxiliary Volunt	SBA Communication Corporation	1015 Dominion Road	Town of Fort Erie	2703-020-008-27200	3446687	2021
Russell Reaman Boddy	SBA Communication Corporation	2666-2722 Line 12	Town of Bradford West Gwillimbury	4312-020-003-24700	3412716	2020
Russell Reaman Boddy	SBA Communication Corporation	2666-2722 Line 12	Town of Bradford West Gwillimbury	4312-020-003-24700	3446484	2021
Russell Reaman Boddy	SBA Communication Corporation	2666-2722 Line 12	Town of Bradford West Gwillimbury	4312-020-003-24700	3489309	2022
Raymond Douglas Damude	SBA Communication Corporation	5801 Highway 3	City of Port Colborne	2711-040-001-05300	3412661	2020
Raymond Douglas Damude	SBA Communication Corporation	5801 Highway 3	City of Port Colborne	2711-040-001-05300	3446579	2021
Fort Erie Town, c/o SBA Canada ULC	SBA Communication Corporation	3732 Garrison Road	Town of Fort Erie	2703-020-024-39550	3412660	2020
Fort Erie Town, c/o SBA Canada ULC	SBA Communication Corporation	3732 Garrison Road	Town of Fort Erie	2703-020-024-39550	3446704	2021
2211096 Ontario Inc.	SBA Communication Corporation	1718 Forkes Road	City of Port Colborne	2711-040-005-25002	3412662	2020
2211096 Ontario Inc.	SBA Communication Corporation	1718 Forkes Road	City of Port Colborne	2711-040-005-25002	3446793	2021
2211096 Ontario Inc.	SBA Communication Corporation	1718 Forkes Road	City of Port Colborne	2711-040-005-25002	3489515	2022