CITATION: County of Lambton Community Development Corporation v. Municipal Property Assessment Corporation et al., 2023 ONSC 3434
DIVISIONAL COURT FILE NO.: 3/22
DATE: 20230606
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Fregeau, Matheson and Nishikawa JJ.
B E T W E E N:
COUNTY OF LAMBTON COMMUNITY DEVELOPMENT CORPORATION
C. Kuehl and L. Sun, for the County of Lambton Community Development Corporation
Applicant/Appellant
- and -
MUNICIPAL PROPERTY ASSESSMENT CORPORATION and THE CORPORATION OF THE CITY OF SARNIA
S. Corman and H. Brown, for the Municipal Property Assessment Corporation
O. Nisbet, for the Corporation of the City of Sarnia
Respondents/Respondents on Appeal
HEARD: At London via video conference on April 26, 2023
REASONS FOR DECISION
Fregeau J.
INTRODUCTION
[1] The appellant, the County of Lambton Community Development Corporation (the “CLCDC”) brought an application seeking a declaration that it was a “local board” as defined by the Municipal Affairs Act, R.S.O. 1990, c. M.46, as amended (the “Municipal Affairs Act”) such that it would be exempt from taxation pursuant to s. 3(1)(9) of the Assessment Act, R.S.O. 1990, c. A.31, as amended (the “Assessment Act”).
[2] In an Endorsement dated December 16, 2021 (the “Decision”), the application judge dismissed CLCDC’s application. The application judge held that the CLCDC is not a “local board” as defined by the Municipal Affairs Act and that it is therefore not exempt from taxation pursuant to s. 3(1)(9) of the Assessment Act.
[3] CLCDC appeals to this court asking that the Decision of the application judge be set aside and that its application for a declaration that it is a “local board” as defined by the Municipal Affairs Act be granted.
[4] For the reasons that follow, I find that the application judge was correct in finding that the CLCDC is not a “local board” as defined in the Municipal Affairs Act and that it is therefore not exempt from taxation pursuant to s. 3(1)(9) of the Assessment Act.
BACKGROUND
[5] The background facts are fully set out in the Decision and will be referred to in these reasons only to the extent necessary to dispose of the appeal.
[6] The CLCDC is a not-for-profit community development corporation established by the County of Lambton in 2003 pursuant to the now-repealed “community development corporations” provisions under s. 109 of the Municipal Act, 2001, S.O. 2001, c. 25 (the “Municipal Act”).[^1]
[7] The CLCDC owns the property municipally known as 1086 Modeland Road, Sarnia, Ontario (the “property”). The CLCDC was created for the sole purpose of owning and operating the Western Sarnia-Lambton Research Park (the “Research Park”) located at the property. The Research Park has a site area of 77.78 acres comprised of several buildings.
[8] The Municipal Property Assessment Corporation (“MPAC”) is responsible for assessing and classifying all properties in Ontario, including the Research Park, in compliance with the Assessment Act. The Corporation of the City of Sarnia (“Sarnia”) is a municipal corporation located in the County of Lambton. The Research Park is located in Sarnia. Sarnia took no position on the application or on this appeal.
[9] Pursuant to s. 3(1) of the Assessment Act, all real property in Ontario is liable to assessment and taxation, subject to a list of 29 specified exemptions. Section 3(1)(9) of the Assessment Act also provides for an exemption from municipal property tax for “… land owned by a municipality, including an upper-tier municipality, a public commission or a local board as defined in the Municipal Affairs Act.”
[10] Section 1 of the Municipal Affairs Act defines “local board” as follows:
“local board” means a school board, municipal service board, transportation commission, public library board, board of health, police services board, planning board, or any other board, commission, committee, body or local authority established or exercising any power or authority under any general or special Act with respect to any of the affairs or purposes, including school purposes, of a municipality or of two or more municipalities or parts thereof.
THE DECISION OF THE APPLICATION JUDGE
[11] The application judge identified the sole issue on the application as whether the CLCDC had established, on a balance of probabilities, that it was entitled to the exemption from assessment and taxation set forth in s. 3(1)(9) of the Assessment Act on the basis that it is a “local board” as defined in s. 1 of the Municipal Affairs Act.
[12] The application judge rejected CLCDC’s submission that it was a “local board” as defined in s. 1 of the Municipal Affairs Act because it is a “body” that is “exercising power or authority under an Act” (the former s. 109 of the Municipal Act) “with respect to the purpose of a municipality” by facilitating economic development on behalf of Lambton.
[13] The application judge accepted that s. 1 of the Municipal Affairs Act must be read as a whole. However, the application judge ultimately rejected CLCDC’s interpretation of s. 1, finding that CLCDC’s interpretation incorrectly reads the language at the end of the definition in a stand-alone manner, ignoring the specific list of entities at the beginning of the definition.
[14] In concluding that the CLCDC is not a “local board” as defined in s. 1 of the Municipal Affairs Act and therefore not exempt from taxation as prescribed in s. 3(1)(9) of the Assessment Act, the application judge applied the ejusdem generis principle of statutory interpretation to s. 1 of the Municipal Act. Pursuant to this principle of statutory interpretation, where a class of things is modified by general wording that expands the class, the general wording is usually restricted to things of the same type as the listed items.
[15] The application judge held, at para. 69 of the Decision, that CLCDC’s interpretation of s. 1 of the Municipal Affairs Act, as it applied to the term “local board”, incorrectly disregarded the entities listed at the beginning of the definition of “local board”, which entities are dissimilar to the CLCDC.
[16] At para. 71 of the Decision, the application judge also found, “in addition to the principle of ejusdem generis”, that the 29 exempted entities listed under s. 3(1) of the Assessment Act are “clearly and specifically defined” and that “there is no wording that expands the definition of the exemption beyond the referenced heading”. The application judge concluded, at para 72 of the Decision, that “the interpretation suggested by [the CLCDC] would effectively rewrite the legislation as it would create a 30th category of exemption”.
THE POSITIONS OF THE PARTIES
CLCDC
[17] CLCDC submits that the application judge erred in interpreting “local board” solely within the context of the Assessment Act and in failing to give any effect to the clear direction that “local board” is to be defined in reference to the Municipal Affairs Act.
[18] CLCDC suggests that the application judge erred in law in doing so and incorrectly restricted the definition of “local board” contrary to the intentionally broad language used in the Municipal Affairs Act. CLCDC contends that the application judge failed to recognize that the Municipal Affairs Act is not a taxation statute and that its provisions should not be interpreted simply by applying the purpose and context of the Assessment Act.
[19] CLCDC further submits that the application judge erred in law in failing to give effect to the plain and ordinary meaning of “local board”, resulting in an overly narrow interpretation and an incorrect conclusion that the CLCDC was not a “local board” as defined in the Municipal Affairs Act and therefore not exempt from taxation pursuant to s. 3(1)(9) of the Assessment Act.
[20] CLDC further submits that its role as a local board is shown by its incorporation as a community development corporation under s. 109 of the former Municipal Act.
MPAC
[21] MPAC submits that the application judge correctly applied the ejusdem generis principle when rejecting the appellant’s overly broad interpretation of the definition of “local board” in the Municipal Affairs Act.
[22] MPAC submits that the application judge correctly concluded that the application of the ejusdem generis principle to s. 1 of the Municipal Affairs Act significantly narrows the scope of the general wording in the definition to entities of the same type as those listed at the beginning of the definition. MPAC suggest that the appellant’s analysis ignores this principle of statutory interpretation.
[23] MPAC further submits that the application judge correctly concluded that CLCDC’s interpretation of “local board” runs counter to the purpose and scheme of s. 3(1) of the Assessment Act, that being that all land in Ontario is subject to taxation except express categories of exempt land.
DISCUSSION
[24] This appeal raises issues of statutory interpretation. It is not in dispute that the standard of review is correctness: Housen v. Nikolaisen, 2002 SCC 33, at para. 8.
[25] When rejecting the CLCDC’s interpretation of the phrase “local board” as defined in s. 1 of the Municipal Affairs Act, the application judge applied the Court of Appeal for Ontario decision in Ontario Ombudsman v. Hamilton (City), 2018 ONCA 502 (“Ontario Ombudsman”). The issue in Ontario Ombudsman was whether the Audit Committee and Property Standards Committee of the City of Hamilton were “local boards” within the meaning of the Municipal Act. The definition of “local board” in the Municipal Act is, for all intents and purposes, identical to the definition of “local board” in the Municipal Affairs Act.
[26] At para. 9 of Ontario Ombudsman, quoted by the application judge at para. 65 of the Decision, the Court stated as follows:
The Ombudsman’s submissions would have considerable force if the general language at the end of the definition of “local board” stood alone. It does not. That general language follows the identification of several specific entities as “local boards”. As this court recently observed in Schnarr v. Blue Mountain Resorts Limited, 2018 ONCA 313, at para. 52:
Where a class of things is modified by general wording that expands the class, the general wording is usually restricted to things of the same type as the listed items (ejusdem generis).
[27] In applying this principle, the Court in Ontario Ombudsman, at paras. 10 and 13, held that:
[10] All of the named entities in the definition of “local board” provide services which are integral to the day-to-day operation of the business of municipalities. Neither the Audit Committee nor the Standards Committee provide the same type of services.
[13] Applying ejusdem generis to the definition of “local board”, we are satisfied that the general language at the end of the definition does not include entities which cannot be said to carry on the operations of the municipality. The functions of the Audit Committee and the Standards Committee do not fall within that descriptor. They are not local boards.
[28] At para. 66 of the Decision, the application judge applied the same principle of interpretation to the facts before him. In my view, he was correct in doing so.
[29] I accept the submission of MPAC that the CLCDC is entirely dissimilar to the entities listed at the beginning of the definition of “local board” in s. 1 of the Municipal Affairs Act, all of which carry on day-to-day operations integral to the business of municipalities. The CLCDC was created to administer and operate the Research Park in partnership with an educational institution, the University of Western Ontario. As the application judge noted, CLCDC is not the economic development entity in the area. That role belongs to the Sarnia Lambton Business Development Corporation. The CLCDC does not provide any core municipal services of the same type as provided by entities such as a school board, a police services board or a planning board.
[30] The CLCDC was incorporated as a community development corporation under s. 109 of the former Municipal Act. However, s. 109(9) of that provision expressly provided that such a corporation could be deemed to be a local board, which would be unnecessary if these corporations were local boards. Subsection 109(8) is also not of assistance, since it provides that these corporations are considered local boards for a different purpose (the purpose of the Municipal Conflict of Interest Act) only if certain criteria are met.
[31] In my view, the application judge was correct in concluding that the CLCDC’s interpretation of “local board” was overly broad and inconsistent with applicable principles of statutory interpretation. The application judge was also correct in following Ontario Ombudsman and in applying the ejusdem generis principle to the definition of “local board” in s. 1 of the Municipal Affairs Act when reaching the conclusion that the CLCDC is not a “local board”.
[32] The appeal is dismissed. In accordance with the agreement of the parties, the CLCDC shall pay costs for this appeal in the amount of $10,000, inclusive of fees, disbursements and HST, to MPAC.
“The Hon. Mr. Justice J.S. Fregeau”
“Matheson J.”
“Nishikawa J.”
Released: June 6, 2023
CITATION: County of Lambton Community Development Corporation v. Municipal Property Assessment Corporation et al., 2023 ONSC 3434
DIVISIONAL COURT FILE NO.: 3/22
DATE: 20230606
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Fregeau, Matheson and Nishikawa JJ.
B E T W E E N:
COUNTY OF LAMBTON COMMUNITY DEVELOPMENT CORPORATION
Applicant/Appellant
- and –
MUNICIPAL PROPERTY ASSESSMENT CORPORATION and THE CORPORATION OF THE CITY OF SARNIA
Respondents/Respondents on Appeal
REASONS FOR DECISION
Fregeau J.
Released: June 6, 2023
[^1]: Section 109 of the Municipal Act repealed by 2006, c. 32, Sched. A, s. 50.