The Young Men's Christian Association of Greater Toronto v. Municipal Property Assessment Corporation et al.
[Indexed as: Young Men's Christian Assn. of Greater Toronto v. Municipal Property Assessment Corp.]
Ontario Reports
Ontario Superior Court of Justice,
Perell J.
June 16, 2014
121 O.R. (3d) 34 | 2014 ONSC 3657
Case Summary
Assessment — Exemptions — Section 10 of YMCA Act exempting from property taxation "buildings, lands, equipment and undertaking of" YMCA — "Lands of YMCA" meaning lands owned by YMCA — Premises leased by YMCA not qualifying for exemption in s. 10 — Act to Incorporate the Toronto Young Men's Christian Association, s. 10.
The YMCA brought an application for an exemption from assessment for municipal property tax for properties that it occupied under leases.
Held, the application should be dismissed.
Section 10 of an Act to Incorporate the Toronto Young Men's Christian Association provides an exemption from property taxation for the "buildings, lands, equipment and undertaking" of the YMCA. "Lands of the YMCA" means lands owned by the YMCA. The leased premises were not owned by the YMCA and did not qualify for the exemption in s. 10.
Kitchener-Waterloo Young Men's Christian Assn. v. Municipal Property Assessment Corp., [2007] O.J. No. 3176 (S.C.J.); Markham York Hospital and Markham (Town) (Re) (1976), [1976] O.J. No. 2107, 12 O.R. (2d) 238, 68 D.L.R. (3d) 422 (H.C.J.); Royal Ontario Museum and Assessment Commissioner for Region No. 10 (Re) (1976), 12 O.R. (2d) 778, [1976] O.J. No. 2170 (Div. Ct.); Walkerville (Town) and Walker (Re), [1935] O.J. No. 35, [1935] O.W.N. 168 (C.A.), consd
Other cases referred to
Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, [2002] S.C.J. No. 43, 2002 SCC 42; Highway Properties Ltd. v. Kelly, Douglas and Co., 1971 123 (SCC); R. v. Dubois, 1935 1 (SCC); R. v. Goldman, 1979 60 (SCC); R. v. Huggins, 2010 ONCA 746; R. v. McIntosh (1995), 1995 124 (SCC); R. v. The Judge of the City of London Court, [1892] 1 Q.B. 273 (C.A.); Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 837 (SCC); Victoria (City) v. Bishop of Vancouver Island, 1921 568 (UK JCPC); Zeitel v. Ellscheid, 1994 82 (SCC).
Statutes referred to
Act to Incorporate the Toronto Young Men's Christian Association, s. 10
Assessment Act, R.S.O. 1927, c. 238, s. 4(10)
Assessment Act, R.S.O. 1970, c. 32, s. 3, paras. 12, 14
Assessment Act, R.S.O. 1990, c. A.31, s. 1 [as am.]
Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) [as am.]
The Kitchener-Waterloo YMCA Act, 1928, ss. 11(1), 11.1
University of Toronto Act
Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 14.05(3) (d)
APPLICATION for an exemption from a municipal property tax assessment.
Stephen Longo, for applicant.
Shawn Douglas, for respondents.
PERELL J.: —
A. Introduction
[1] This application turns on the statutory interpretation of the word "of".
[2] Pursuant to rule 14.05(3)(d) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the Young Men's Christian Association of Greater Toronto ("YMCA") brings an application for an exemption from assessment for municipal property tax. It seeks an exemption for properties that it occupies under leases in four buildings. The YMCA also seeks an order that the assessment roll for the City of Toronto be altered to reflect the exempt status and that any taxes paid for the four leased properties for 2012 and any subsequent taxation years be refunded to the YMCA.
[3] The respondents are the Municipal Property Assessment Corporation ("MPAC") and the City of Toronto.
[4] It should be noted that the YMCA has brought similar applications with respect to properties it leases in other municipalities in the Greater Toronto Area, including Mississauga, Markham, Uxbridge, Bolton and Port Perry. The parties have agreed that for these applications, they will be bound by the decision made in the immediate case.
[5] For the reasons that follow, I conclude that the application should be dismissed. In my opinion, the YMCA's leased premises are not exempt from taxation.
B. Factual Background
[6] The YMCA is a registered charity under the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) and a non-profit corporation. It focuses on community support. The mission of the YMCA is to provide individuals in the community with opportunities for personal growth, community involvement and leadership. The three primary areas in which the YMCA now carries on its programs to achieve its purposes are (1) employment preparation and training; (2) daycare/after-school care; and (3) promotion and protection of health.
[7] The YMCA was established pursuant to an Act to Incorporate the Toronto Young Men's Christian Association ("YMCA Act"). The YMCA Act received royal assent on March 27, 1923, and it has not been amended since its enactment.
[8] The chart below identifies the four properties for which exemptions are being sought and the uses being made of the various properties.
[9] Section 10 of the YMCA Act provides an exemption from property taxation as follows:
- The buildings, lands, equipment and undertaking of the said association so long as and to extent to which they are occupied by, used and carried on for the purposes of the said association are declared to be exempted from taxation except for local improvements.
C. Position of the Parties
[10] The crucial issue in this application is that of interpreting the meaning of s. 10 of the YMCA Act.
[11] It is MPAC's position that the YMCA's properties are only exempt if the property is both occupied by the YMCA and "owned" by the YMCA. To be more precise, it is MPAC's position that the exemption found in s. 10 of the YMCA Act is only available for properties for which the YMCA is the owner of the title in fee simple of the property.
[12] Thus, MPAC accepts that the 7 Vanauley Avenue property is exempt from taxation effective as of August 16, 2013, when this property was purchased by the YMCA. It disputes, however, that there should be any refund for taxes paid before the transfer of ownership.
[13] The YMCA says that s. 10 provides an exemption for properties owned by the YMCA and also properties leased by the YMCA. Further, it relies on the decision of Justice Taylor in Kitchener-Waterloo Young Men's Christian Assn. v. Municipal Property Assessment Corp., in which legislation in para materia with the YMCA Act was interpreted to provide an exemption for leasehold holdings.
D. Discussion and Analysis
[14] The issue of whether the YMCA's four leased properties are exempt from assessment is a matter of statutory interpretation.
[15] When a court is called upon to interpret a statute, its task is to discover the intention of the legislator as expressed in the language of the statute. The court's approach to interpretation is teleological or purposeful, and to interpret a statute, the words of the 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 legislator. The court's role is to interpret the statute not enact it; if the sense of the words of the statute is clear and unambiguous, the court must interpret the words literally and in accordance with their plain meaning even if the consequences are absurd or unjust.
[16] Pursuant to the definitions found in s. 1 of the Assessment Act, "land", "real property" and "real estate" are assessable.
[17] As noted above, the YMCA relies on s. 10 of the YMCA Act for an exemption from assessment.
[18] For present purposes, it can be taken that the four leased premises were "occupied by, used and carried on for the purposes of the YMCA".
[19] I emphasize the words "of the YMCA" because the outcome of this application turns on the interpretation of the word "of".
[20] Literally speaking, a lease is not "the equipment of the YMCA", and literally speaking, a lease is not an "undertaking of the YMCA". Literally speaking, a "building" can be leased, but a lease is not "a building of the YMCA". Thus, the interpretative issue narrows further to become whether the YMCA's four leases are "land of the YMCA".
[21] There are two questions here: (1) are leases "land"; and (2) are the YMCA's leases "land of the YMCA"?
[22] The answer to the first question is yes. As a matter of real property law, a lease is "land".
[23] Historically, leases began as a type of personal property...
[24] This all said, the YMCA's leases are within the meaning of the word "land".
[25] The dictionary definitions of "of" are quite long because "of" is a quite powerful preposition indicating the relationship between words.
[26] Amongst the listed connective uses of "of" found in the above dictionary definition are the ideas of indicating "belonging and possession".
[27] Returning to the problem at hand, I would interpret "land of the YMCA" in s. 10 of the YMCA Act to mean the same as the "YMCA's land" and I would interpret "land of the YMCA" to mean "land owned by YMCA".
[28] This meaning of leasing land is its common, literal and everyday meaning.
[29] This brings me to the ultimate conclusion of the interpretative analysis, which is to conclude that the YMCA's four leases, while technically "land" are not "land of the YMCA". Therefore, the YMCA's leases do not qualify for the exemption found in s. 10 of the YMCA Act.
[30] With the exception of Kitchener-Waterloo Young Men's Christian Assn. v. Municipal Property Assessment Corp., the case law about exemptions to assessment supports the above interpretative analysis.
[31] In Walkerville (Town) and Walker (Re), the Court of Appeal held that a leasehold interest did not make the leased property the property of the society.
[32] In Markham York Hospital and Markham (Town) (Re), charities leasing property under 99‑year leases were not considered owners.
[33] The case demonstrates that ownership of a leasehold interest is not equivalent to ownership of land for assessment exemptions.
[34] In Royal Ontario Museum and Assessment Commissioner for Region No. 10 (Re), the Divisional Court held that "property of" did not include a leasehold interest.
[35] The above cases support my conclusion that a leasehold interest does not trigger an exemption under s. 10 of the YMCA Act.
[36] Justice Taylor concluded in Kitchener‑Waterloo YMCA that the organization was entitled to an exemption pursuant to its own statute.
[37] That reasoning relied heavily on a 2005 statutory amendment.
[38] The preamble to the 2005 amending Act stated:
(The preamble text appears here exactly as in the source.)
[39] Save for one matter discussed below, I have no quarrel with Justice Taylor's judgment.
[40] In the case at bar, there is no codifying language making the legislative intent clear.
[41] Justice Taylor also noted examples of other statutes restricting exemptions to property that is "owned".
[42] I agree with Justice Taylor's observations that legislative treatment of similar organizations varies.
[43] In Royal Ontario Museum it was also notable that the University of Toronto Act contained an explicit exemption for leased premises.
[44] Justice Taylor attempted to distinguish that case.
[45] I do not agree with Justice Taylor's reasons for distinguishing it.
[46] In the case at bar, I interpret "the lands of the YMCA" to mean lands owned by the YMCA.
[47] Therefore, there is no exemption in the case at bar.
E. Conclusion
[48] For the above reasons, I dismiss the YMCA's application.
[49] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with the submissions of MPAC within 20 days of the release of these reasons for decision followed by the YMCA's submissions within a further 20 days.
Application dismissed.
End of Document