COURT OF APPEAL FOR ONTARIO
CATZMAN, DOHERTY and ARMSTRONG JJ.A.
B E T W E E N:
THE DIOCESE OF TORONTO CAMPS, (ANGLICAN CHURCH OF CANADA) and THE CORPORATION OF THE TOWNSHIP OF RAMARA
Applicant/Respondent
(Respondents in appeal)
- and -
MUNICIPAL PROPERTY ASSESSMENT CORPORATION
Christian G. Schulze for the appellant
Yvonne J. Hamlin for the respondents
Respondent
(Appellant)
Heard: October 1, 2004
On appeal from the order of the Superior Court of Justice (Divisional Court) dated October 22, 2003, reported at (2003), 2003 48328 (ON SCDC), 67 O.R. (3d) 619, allowing an appeal from the order of Justice P. Theodore Matlow of the Superior Court dated December 6, 2001.
DOHERTY J.A.:
I
Overview
1All real property in Ontario is subject to assessment under the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”). Subject to enumerated exemptions, all real property in Ontario is subject to taxation under the Act. One of the exemptions exempts land owned and used by a non-profit philanthropic corporation for the purpose of “the care of children”.
2The respondent, the Diocese of Toronto Camps (Anglican Church of Canada) (the “Diocese”) is a non-profit philanthropic corporation. It operates Camp Couchiching (“the Camp”), a camp for children on land it owns in Ramara Township.
3The Diocese brought an application under the Act for a declaration that the land on which the Camp was located was exempt from taxation under the Act because it was used for the purpose of the care of the children who attended the Camp. The application judge held that the primary purpose of the Camp was recreational and that it was, therefore, not exempt from taxation under the Act.1 The Diocese appealed to the Divisional Court. That court reversed and held that the Diocese was entitled to the exemption. The Municipal Property Assessment Corporation (“M.P.A.C.”) successfully moved in this court for leave to appeal from the decision of the Divisional Court.
4I would allow the appeal and restore the order dismissing the Diocese’s claim for an exemption under the Act. The application judge found as a fact that the primary purpose of the land was recreational. There was ample evidence to support that finding. The reasons of the application judge revealed no misapprehension of the evidence, legal error, or other ground which could justify appellate interference. The Divisional Court should not have reversed that finding in the absence of clear and palpable error. On the finding of the application judge, the Diocese was not entitled to the exemption.
II
The Facts
5The Diocese is a non-profit corporation organized under the laws of Ontario. Its charter includes the following object:
To undertake such enterprises as may be considered desirable for the spiritual, mental, social and physical strengthening and improvement of children and young people.
6The Camp operates on 20 acres of rural land located in Ramara Township. In the summer months, children attend the Camp for two week sessions. There are four sessions each summer. The children attend without their parents on a full-time basis throughout the two weeks. They live in groups in cabins under the supervision of counsellors. The Diocese provides a wide variety of recreational activity for the campers, including boating, canoeing, and tennis. The Diocese also provides shelter, supervision, nourishment and medical attention for the campers. While the campers are at the Camp, the Diocese is responsible for all aspects of their safety and well-being.
7In the spring and fall, the Diocese offers three or four day “outdoor centre” programs at the Camp for students in public and separate school between grades five and eight. While these students are at the Camp, the Diocese is responsible for their care.
8During the summer sessions, a significant number of children with a variety of medical problems, such as epilepsy and severe asthma, attend the Camp. These problems give rise to various special needs. Approximately ten to twenty percent of the children attending any given session will have significant special needs. Some require one to one attention. The Camp seeks to provide a residential summer camping experience where children with and without special needs are brought together in a setting where they can enjoy the same experiences. This integration is crucial to the unique experience offered to all of the campers.
9The Camp provides medical and dietary services for its special needs campers that are well beyond those found in most children’s summer camps.
III
The Scope of the Exemption
10Section 3(1), para. 11 provides:
All real property in Ontario is liable to assessment and taxation, subject to the following exemptions from taxation:
- Land owned, used and occupied by a non-profit philanthropic corporation for the purpose of a house of refuge, the reformation of offenders, the care of children or a similar purpose but excluding land used for the purpose of a day care centre [emphasis added].2
11The exemption in para. 11 is available only if the party seeking the exemption can show that the primary purpose for which the land is used and occupied is one of the purposes identified in para. 11. As MacPherson J. said in Re Buenavista on the Rideau v. Regional Assessment Commissioner, Region No. 2 (1996), 1996 11792 (ON SC), 28 O.R. (3d) 272 at 276 (Div. Ct.):
Finally, the test for determining whether an exemption should be granted is whether the primary purpose of the institution comes within the words defining the exemption in the Assessment Act. This is true with respect to s. 3 of the Assessment Act generally … It is also true with respect to the interpretation of the specific exemptions set out in s. 3, para. 11 of the Assessment Act [citations omitted].
12The “primary purpose” test employed in Re Buenavista is well established in the jurisprudence of this province. It requires an objective determination of the principal purpose for which the land is used and occupied. That purpose must be distinguished from others that are incidental to it: see Les Soeurs de la Visitation d’Ottawa v. The City of Ottawa, 1951 109 (ON SC), [1952] O.R. 61 at 64, 71 (H.C.), aff’d, 1952 283 (ON CA), [1952] 3 D.L.R. 640 (Ont. C.A.); Associated Gospel Churches v. Ontario (Regional Assessment Commissioner, Region No. 13) (1979), 9 M.P.L.R. 287 (Ont. Div. Ct.); Presbyterian Church in Canada v. Ontario (Regional Assessment Commissioner, Region No. 22), [1995] O.J. No. 1492 at para. 16 (Gen. Div.); Childreach Centre v. Ontario (Regional Assessment Commissioner Region No. 23) (2000), 16 M.P.L.R. (3d) 191 at para. 54 (Ont. S.C.J.).
13Counsel for M.P.A.C. acknowledges that while children are attending the Camp they are under the care of those in charge of the Camp. He submits, however, that the primary purpose of the Camp is recreational and that the care of children who are there to use and enjoy the outdoor recreational facilities is incidental to the primary recreational purpose. As counsel put it, the purpose of the camping experience is to use and enjoy the outdoor recreational facilities, not to be cared for by the camp staff.
14Counsel for the Diocese accepts the primary purpose test. She submits that the primary purpose of the Camp is the care of the children who are attending the Camp. Counsel urges the court to adopt a meaning of the phrase “the care of children” that encompasses not only the physical aspects of care such as providing food, protection, shelter and medical attention, but extends to education, recreation and any function that could properly be viewed as part of the role of a parent. If counsel’s submission is adopted, the distinction relied on by M.P.A.C. between the Camp’s recreational purpose and its incidental care of the children who are attending the Camp for the recreational purpose disappears in that recreation is but a facet of the care of the children.
15Taxing statutes, including exemptions within those statutes, are subject to the generally applicable rules of statutory interpretation. The provision must be read in its statutory context having regard to the ordinary and grammatical meaning of the words used, the scheme and object of the statute, and the intention of the legislature: Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559; Québec (Communauté Urbaine) v. Corporation Notre-Dame de Bon-Secours, 1994 58 (SCC), [1994] 3 S.C.R. 3 at 17.
16Where a court must interpret one of the exemptions provided for in s. 3(1) of the Act, the interpretive exercise comes down to a determination of the scope of the exemption. That interpretive process is informed by an appreciation that the exemptions reflect the legislature’s assessment of competing policy considerations. As this court explained in Ottawa Salus Corp. v. Municipal Property Assessment Corp. (2004), 2004 14620 (ON CA), 69 O.R. (3d) 417 at para. 26:
Exemption from property tax allows these organizations to spend more of their limited resources on those activities. The clear implication of these exemptions is that while there is a substantial public interest in the generation of revenue through the taxation of real property, in the context of the real property covered by these exemptions, that public interest is outweighed by the public interest in giving relief from property taxation to certain organizations.
17The exemptions spelled out in para. 11 are but a few among the many created in the 28 paragraphs of s. 3(1) of the Act. In determining the appropriate meaning of the phrase “care of children” in para. 11, regard must be had to the other exemptions: Ottawa Salus, supra at 752. There are specific exemptions tied to the ownership and use of land for educational and religious purposes (paras. 3, 4, 5). If the broad meaning of the phrase “care of children” advanced by the Diocese is accepted, the education and religious training of children are but aspects of their care. Land used for the educational or religious training of children could be exempt from realty tax under the “care of children” exemption in para. 11, even though it did not qualify under the specific exemptions directed at educational and religious purposes. If the Diocese’s interpretation of “the care of children” is accepted, that exemption would effectively swallow up the exemptions specifically created for educational and religious purposes insofar as they applied to children.
18The Legislature has specifically addressed the competing policy interests inherent in determining whether property should be exempt from tax based on ownership, occupation, and use of land for religious and educational purposes. The words “the care of children” should not be read so as to significantly broaden the educational and religious exemptions created by the Legislature.
19Counsel for M.P.A.C. also argued that the other exemptions referred to in para. 11 support the contention that “care of children” refers to physical care such as shelter, protection and nourishment. This argument had substantial merit under the previous version of para. 11.3 Under the previous version, all of the exemptions set out in para. 11 referred to residential institutions. The care provided by a residential institution necessarily includes things like shelter and physical protection: see Re Buenavista, supra at 278; Re Family Service Association of Metropolitan Toronto and Regional Assessment Commissioner, Region No. 9 (1995), 1995 7047 (ON SC), 23 O.R. (3d) 382 at 396 (Gen. Div.).
20The language used to describe the exemptions in the present version of para. 11 does not, however, describe places of residence. One of the exemptions is described by the phrase “the reformation of offenders”. This exemption would not appear to be connected to any residency requirement. Consequently, I cannot accept that residency remains a common feature of the exemptions described in para. 11.
21Although I cannot accept M.P.A.C.’s argument based on the other exemptions in para. 11, I do accept counsel’s submission that the phrase “care of children”, when placed in the context of all of the exemptions described in s. 3(1), refers to the physical aspects of the care of children such as protection, shelter, medical care, and nourishment.
IV
Did the Application Judge Make a Reversible Error?
22As I interpret “the care of children”, there is a distinction between the Camp’s recreational purpose and its care of children who are attending the Camp for recreational purposes. The application judge was alive to that distinction and concluded that the recreational purpose was the primary purpose for which the land was owned, used and occupied. That was a finding of fact based on an inference drawn from the evidence as to the nature of the Camp’s operations. That finding is entitled to deference even though it was based on a paper record and there was very little dispute as to the primary facts: Equity Waste Management of Canada v. Halton Hills (Town) (1997), 1997 2742 (ON CA), 35 O.R. (3d) 321 at 333-336 (C.A.).
23The Divisional Court recognized the deference due to the application judge’s finding of fact. However, it concluded that intervention was warranted on two grounds. First, the Divisional Court held (at para. 20) that the application judge misinterpreted the exemption by limiting its application to situations in which the purpose for which the land was used involved the permanent, or something very close to permanent, care of children.
24I agree that the exemption can be triggered where the care of children is temporary. This is evident from the specific exclusion of day care centres from the exemption. If permanence was a hallmark of the “care of children” exemption, there would be no need to specifically exclude day care centres from that exemption.
25The reasons of the application judge are conclusory. I do not agree, however, that he fell into the error attributed to him by the Divisional Court. In the final paragraph of his reasons, the application judge said:
As well, the residential care of the campers while they attend camp for two week periods is also ancillary to the recreational nature of the camp. The campers generally have permanent homes elsewhere to where they return and it cannot be said that this short-term care falls within the meaning of “care of children” contemplated by the Act.
26The application judge does not say that the care of children has to be permanent before the exemption applies. Rather, the application judge indicates that the brief preset term of the campers’ stay, combined with the fact that the campers were not in need of care and had permanent homes, supported the inference that they went to the Camp for recreation and not for care. I think those factors were relevant to a determination of the primary purpose for which the land occupied by the Camp was used by the Diocese.
27The second error identified by the Divisional Court is referred to in the final paragraph of its reasons:
We find that the application judge failed to take these facts into account in coming to his conclusion, thereby making a palpable and overriding error (at para. 29).
28The reference to “these facts” would appear to be a reference to the immediately preceding paragraph, where the court said:
The Diocese says there is a common feature to the specific exemptions in the legislation over the years and it is that they are all “charitable”. We find that this brings the Camp out of the purview of the for profit, privately run recreational camps for healthy children and medically fit children (at para. 28).
29With respect, the charitable nature of the Camp and its laudable goal of providing an integrated summer recreational experience for special needs children had nothing to do with whether the primary purpose of the Camp was “the care of children”. Land is exempt from taxation under para. 11 only if it is owned, used, and occupied by a non-profit philanthropic corporation and is used for the purpose of the care of children. The fact that it meets the first criterion cannot assist in determining whether it meets the second. Similarly, the special needs of some of the campers may affect the kind of care that must be available at the Camp, but they do not affect the primary purpose of the Camp.
V
30There was no basis upon which the Divisional Court could properly interfere with the finding of fact made by the application judge. I would allow the appeal and restore his order dismissing the application.
31The parties agree that this is not a case for costs.
RELEASED: “MAC” “NOV 3 2004”
“Doherty J.A.”
“I agree: M.A. Catzman J.A.”
“I agree Robert P. Armstrong J.A.”
Footnotes
- On the application, the Diocese also unsuccessfully argued that it was exempt from taxation under an “educational” exemption in para. 5 of s. 3(1) of the Act. The Diocese did not make that argument in the Divisional Court and it is not advanced here.
- The present formulation of para. 11 was enacted in the Fair Municipal Finance Act (No. 2), S.O. 1997, c. 29, s. 3(1).
- “Every industrial farm, house of industry, house of refuge, institution for the reformation of offenders or for the care of children, boys’ and girls’ home, or other similar institution conducted on philanthropic principles and not for the purpose of profit or gain, but only when the land is owned by the institution and occupied and used for the purposes of the institution”: R.S.O. 1990, c. A.31, s. 3(1) para. 11.
