King William Residences Inc v. City of Hamilton, 2022 CanLII 58363

Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 08, 2022

FILE NO.: WR 179142A

AMENDED DECISION ISSUED: June 28, 2022

Assessed Person(s): King William Residences Inc

Appellant(s): King William Residences Inc

Respondent(s): City of Hamilton

Property Location(s): 43-51 King Street East

Municipality(ies): City of Hamilton

Roll Number(s): 2518-020-152-51930-0000

Appeal Number(s): 3461971 and 3461964

Taxation Year(s): 2020 and 2021

Hearing Event No.: 762967

Legislative Authority: Section 357 of the Municipal Act, 2001, S.O. 2001, c. 25

APPEARANCES:

Parties

Representative

King William Residences Inc

Stephen Longo

City of Hamilton

John L. O’Kane

HEARD: April 26, 2022 by video conference

ADJUDICATOR(S):

Carly Stringer, Member Anthony LaRegina, 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 error(s) in the Decision on the first page. The Municipal Property Assessment Corporation has been removed as a Respondent in the Title of Proceedings and from the Appearances section. There are no other changes in this Amended Decision.

OVERVIEW

1King William Residences Inc (the “Appellant”) has brought these appeals before the Assessment Review Board (the “Board”) pursuant to s. 357(7) of the Municipal Act 2001, S.O. 2001, c. 25 (the “Municipal Act”).

2The Appellant is asking the Board to cancel, reduce or refund all or part of taxes levied on 43-51 King Street East in the City of Hamilton, Ontario (the “Subject Property”) for the 2020 and 2021 taxation years, in accordance with s. 357(1)(a) of the Municipal Act.

3The City of Hamilton (the “City”) opposes these appeals.

Result

4For the reasons that follow, the Board denies the appeals.

Background

Description of the Subject Property

5The Subject Property is a parcel of vacant land located in downtown Hamilton. As of the hearing date, construction is underway on the site for a two-tower multi-residential development with ground floor commercial space (the “Development”).

Zoning History

6In order to develop the site, a zoning by-law amendment (“ZBA”) was required to rezone the Subject Property with site-specific regulations.

7The City approved By-Law 18-011 on January 24, 2018, which amended the existing zoning by-law. As part of the City’s approval of this ZBA, a holding provision was put in place to address potential contamination at the site. The holding provision restricted development until certain conditions were met.

8In early 2019, the conditions of the holding provision were satisfied. On May 9, 2019, the City passed By-Law 19-097 to remove the holding provision and change the zoning of the Subject Property.

9A site plan control application for the Development moved forward, and a building permit was issued by the City on June 30, 2021 for construction on the Subject Property.

Property Classification

10The Municipal Property Assessment Corporation (“MPAC”) is responsible for classifying properties in Ontario in accordance with O. Reg. 282/92. Property classification impacts the amount of property tax paid, as different property classes may have different tax rates.

11For the 2020 and 2021 taxation years, MPAC classified the Subject Property in the Commercial property class.

The Appellant Seeks Tax Relief

12The Appellant filed applications with the City seeking tax relief pursuant to s. 357(1) of the Municipal Act. The Appellant said the Subject Property was rezoned in 2019 to permit multi-residential development, and therefore the Subject Property was eligible to be reclassified in the Multi-Residential property class, which had a lower tax rate than the Commercial property class.

13On June 28, 2021, the City denied the Appellant’s request for tax relief.

14The Appellant appealed the City’s denial of its applications. The Board is now tasked with deciding these appeals.

Issues for the Hearing

15The primary issue in these appeals is whether the Appellant is entitled to tax relief pursuant to s. 357(1)(a) of the Municipal Act for the 2020 and 2021 taxation years.

16Section 357(1)(a) of the Municipal Act provides as follows:

357.(1) Cancellation, reduction, refund of taxes. – 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 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 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;

17Therefore, the Board must address the following sub-issues:

1. Was there a change event during the 2020 and 2021 taxation years?
2. If there was a change event, did it result in the Subject Property, or a portion thereof, being eligible to be reclassified in the Multi-Residential property class?

ANALYSIS

Issue 1 - Was there a change event during the 2020 and 2021 taxation years?

Applicable Law

18Subsection 34(2.2)(a) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Assessment Act”) defines “change event” as “a change in the use of all or part of the parcel of land”.

19Both parties referenced the Board’s decision in Philmor (Bloor Walk) Development Corp v Monarch Couture Development Ltd., 2017 CanLII 36453 (ON ARB) (“Monarch Couture”). At paragraph 36 of that case, the Board confirmed that “[a] change in use is a question of fact” and the parties must furnish the Board with evidence regarding the activities carried out on the property at issue.

Submissions of the Parties

20The Appellant submits that a “change in use” is not confined to a physical change. The Appellant submits that the enactment of By-Law 19-097 on May 9, 2019 re-zoned the Subject Property, and constitutes a change event that qualifies the Subject Property for relief under s. 357(1)(a) of the Municipal Act.

21The Appellant further submits that the scheme, purpose and legislative intent of s. 357 of the Municipal Act is to provide relief to taxpayers whose properties change throughout the year resulting in a reduced tax burden. The Appellant submits that the application of s. 357 has been broadened through jurisprudence to make it more inclusive to ensure that taxpayers get relief where required. The Appellant submits that the tax refund provisions in the Municipal Act have the purpose of doing essential justice to taxpayers. The Appellant submits that the words “change in use” should be read in the context of the remedial nature of the Municipal Act to include a change in the zoning that changes the use of the Subject Property.

22The City submits that s. 357(1)(a) provides for within-year tax relief as a result of a change event that results in the Subject Property being eligible to be reclassified. The City submits there was no “change event” within the meaning of s. 34(2.2)(a) of the Assessment Act. The City submits that a change in use is required, not just a change in zoning. The City submits that the Subject Property is under construction for multi-residential development, but construction is not the same as use.

Findings on Issue 1

23The Board finds that the enactment of site-specific By-Law 19-097 is not a change event that would permit relief pursuant to s. 357(1)(a) of the Act for the 2020 and/or 2021 taxation years, for the following reasons:

1. Section 357(1)(a) of the Municipal Act specifically requires that the change event occur “during the taxation year”. The Appellant is seeking relief for the 2020 and 2021 taxation years. By-Law 19-097 was enacted on May 9, 2019. Therefore, it did not occur “during the taxation year”.
2. The Appellant has not provided any case law to support its position that a change in zoning constitutes a change in use. In contrast, the Board has previously held that zoning is not determinative of use: 1251426 Ontario Ltd. v. Municipal Property Assessment [2003] O.A.R.B.D. No. 70 (ON ARB) (“1251426 Ontario Ltd”) at paragraph 14.
3. The Board has consistently held that “use” relates to what is occurring at a particular property: see Monarch Couture, supra at paragraph 36; Gross v. Toronto (City) 2014 CarswellOnt 16648, 85 O.M.B.R. 485 at paragraph 17. The Board has also held that the decision of whether a change event has occurred “needs to focus on use”: see 1251426 Ontario Ltd., supra. This interpretation is consistent with the plain and ordinary meaning of the word “use”.
4. For this reason, the Board does not find that the enactment of By-Law 19-097, on its own, constitutes a change event in the sense of a change in the use of the Subject Property or a portion thereof. While there was a change in zoning, there was no change in use of the Subject Property as it remained vacant until construction commenced in 2021. Construction is still underway. There is no evidence, nor were there submissions, before the Board regarding any other change in use during the 2020 and 2021 taxation years that would result in the Subject Property or a portion thereof being eligible to be classified in a different property class.

24Therefore, there was no change event during the applicable taxation years, and the Appellant is not entitled to relief under s. 357(1)(a).

CONCLUSION

25The Board finds that the Appellant has not satisfied the requirements of s. 357(1)(a). Namely, the Board finds that no change event has occurred in the 2020 and 2021 taxation years resulting in the Subject Property, or a portion thereof, being eligible to be reclassified in a different property class.

ORDER

26The Board denies these appeals and orders that they are dismissed.

“Carly Stringer