Court File and Parties
CITATION: York University, et. al. v. M.P.A.C., et al., 2026 ONSC 755
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
YORK UNIVERSITY, FCS HOLDCO INC., and FCS HOLDCO P2 INC.
Applicants
– and –
MUNICIPAL PROPERTY ASSESSMENT CORPORATION and the CITY OF TORONTO
Respondents
Counsel:
Phillip L. Sanford and Belinda Schubert, for the Applicant York University
Stephen Longo, for the Applicants FCS Holdco Inc. and FCS Holdco P2 Inc.
David Cowling, for the Respondent Municipal Property Assessment Corporation
HEARD: December 16, 2025
BEFORE: AKAZAKI J.
REASONS FOR JUDGMENT
OVERVIEW
1Did four student residence buildings on York University campus lose their exemption from assessment for City of Toronto property tax, because a private developer of student residences built and continue to lease and operate them? The residences could not have lost their exemption because of the identity of one class of users and occupiers. According to the exemption under s. 18 the York University Act, 1965, S.O. 1965, c. 143 (the “Act”), York’s ownership of the buildings meant it did not matter who used or occupied them. What mattered was their use and occupation for the legislated purposes of York.
2After the buildings’ completion, the Municipal Property Assessment Corporation (“MPAC”) issued assessment change notices reversing the properties’ assessment status from exempt to taxable. MPAC considered the buildings’ utility to the developer as profit generators displaced their use and occupation for the purposes of the university. Opposing this change, York sued for a declaration that the property remained exempt.
3York’s exemption depends on two issues embedded in s. 18 of the Act. It consists of two clauses, separated by a comma and the conjunction “and” (underlining added):
- The property vested in the University and any lands and premises leased to and occupied by the University shall not be liable to taxation for provincial, municipal or school purposes, and shall be exempt from every description of taxation so long as the same are actually used and occupied for the purposes of the University.
4The first clause protects York’s property from liability for taxation for municipal or school purposes. The second exempts it from any form of tax if used and occupied for the university’s defined purposes. The buildings form part of York’s freehold. Toronto property tax is for municipal and school purposes. These two facts seem to dispose of the present dispute without delving into the inquiry of the second clause, i.e., how the buildings fit into the university’s statutory purposes.
5However, the Court of Appeal decided, in its oral decision in Donaldo Pianezza Beauty Salon et al. v. Borough of North York et al. (1978), 19 O.R. (2d) 343 (C.A.), at p. 345, that the two clauses in s. 18 combine to form a single exemption. To qualify for the exemption, the buildings owned by York must also satisfy the condition regarding use and occupation for its purposes.
6York did not argue that Donaldo was incorrectly decided or distinguishable. I must follow it and ultimately decide whether the role of the private leasehold operators means the residences are not being used and occupied for the purposes of the university.
7The City of Toronto did not appear at the hearing and filed no submissions. In 2015, the city exempted York from development charges. These are levies for improvements to local infrastructure necessitated by property development. The City accepted a legal opinion provided by York that the levies were a form of municipal taxation, as held in Ontario Cancer Treatment and Research Foundation v. Ottawa (City of) (1998), 38 O.R. (3d) 224 (C.A.), at p. 255, from which the student residences were exempt, by operation of s. 18.1 The City’s concurrence with York on the operation of s. 18 does not bind MPAC. I assumed from the municipality’s absence that it will simply abide by the result of this proceeding.
8In reaching my conclusion that the campus residences are exempt from Toronto property tax, I first considered their development and operation against their historical backdrop. The relocation of Toronto’s second major university to its isolated suburban campus without the capacity to host a significant live-in student body meant it had acquired some problems of a commuter school. York’s administration turned to the private sector to realize a needed transformation of its character and sustainability. I then applied the ordinary rules of statutory construction, albeit with the level of scrutiny appropriate for taxing legislation. This analytical framework led me to the inescapable conclusion that the properties are being used and occupied for the legislated purposes of York University and cannot be reduced to their utility as room and board.
9The identities of the users and occupiers may have been relevant but ultimately did not determine the issue. MPAC’s reductionist utilitarian approach to the purpose of the buildings, as profit centres for FCS Holdco Inc. and FCS Holdco P2 Inc. and as dormitories for York students, belied York’s purpose in having them built to revitalize the campus to its original promise as an interdisciplinary research university at the northwest corner of Toronto’s metropolis.
10These steps in my reasoning are organized under the following headings:
- The Quad Student Housing Complex Development
- Rules of Construction
- Application of Section 18
1. THE QUAD STUDENT HOUSING COMPLEX DEVELOPMENT
11The Quad Student Housing complex (the “Quad”) consists of two six-storey and two eight-storey residences on The Pond Road and Leitch Avenue, within the perimeter of York University’s main Keele Campus. A half century after the university’s origins, the buildings are monuments to the institution’s endeavour to recapture its original mission in the face of geographical and fiscal challenges. In his affidavit, York’s Vice President of Finance and Administration, Narin Kishinchandani, integrated the Quad project into the university’s mission to attract students, research grants, faculty, and staff. The details defined a critical path to the university’s decision to build four new residences.
12York is a public research university founded in 1959 after royal assent to the York University Act, 1959, S.O. 1959, c. 145. It retained its first campus, Glendon College, but, sixteen years later, it established its main Keele campus, coinciding with the passage of the 1965 Act.2 The 460-acre campus in northwest Toronto became a feat of public infrastructure reflecting Ontario in times of urbanization, ambition, and planned sprawl. It now consists of over a hundred diverse buildings for its academic community of 55,000 students and 7,000 faculty. Currently, the Quad has full occupancy, turning away one in four applicants.
13The partnership with a private concern arose from necessity in times very different to the mid-1960’s. Over the decades, the lack of on-campus accommodations had created a disengaged commuter student body in an isolated location ill-served by public transport and unintegrated with neighbouring development. By the new millennium, the only solution was to build residence units, many of them, and immediately. The university’s capacity to launch capital projects faced dual headwinds of government austerity and a ballooning debt load. In 2008, York initiated a procurement process for the design, build, financing, and operation of student residences to change academic life on campus. Preliminary stakeholder consultations and analyses by a consultant, The Scion Group, culminated in a December 2011 report, Student Housing Connections to Academic Mission. The report confirmed that the original model for York’s student community had deteriorated and needed to be rebuilt.
14The Scion report identified the deficit of opportunities for engagement and interaction in the commuter model. Many students interviewed were not even aware of the college affiliations that York had organized to foster inter-disciplinary collaboration. Faculty representations tied programming and pedagogy to a student body socialized by on-campus living in their formative first year and available outside-lecture hours to perform group work. For example, the Environmental Studies faculty saw the encouragement of all entry-level students to live on campus as a prerequisite for the establishment of a sustainability programme. Ultimately, the report prioritized the residence experience:
An institutionally-driven planning process that considers York's unique resources and attributes will lead to an exceptional resident experience for students, and one connected with institutional priorities. Decisions made during this process will impact the student experience at York for future generations of students, and collaborative decision making across the institution should be utilized.
15From the Scion report, York developed a 2012 Housing Strategy, consisting of several structural changes. The existing dormitory residences would focus on first-year students to support the transition to university life. Over the next decade, the campus would require several additional residences with units intended to accommodate upper-year students and international students. The units would include private bedrooms and bathrooms, as well as shared kitchens and a flexible meal plan.
16York supported its position that the Housing Strategy was integral to the university’s academic mandate, by referring to a study of five suburban Canadian university campuses (York was not among them) in the 2008-2013 period. The data showed that residential enrolment in the first year of university boosted academic performance and graduation rates. Students in residence were about 50% less likely to abandon their courses after their first year, compared to the commuter cohort.
17By 2013, York’s long-term debt had ballooned to $303 million. It could not build student residences without incurring further debt, an option that its governors rejected as jeopardizing the university’s financial sustainability. It decided to procure a private-sector builder and operator to fund the construction, in exchange for long-term leaseholds that would finance the capital outlay with student residence fees.
18In 2013, the university entered a Master Development Agreement (“MDA”) with a private developer and operator of student residences. Campus Suites LP and Forum Equity Partners Inc. operate the two phases of the Quad through its subsidiaries FCS Holdco Inc. as nominee for FCS Development LP (for Phase One) and FCS Holdco P2 Inc. as nominee for FCS Development P2 Limited Partnership (for Phase Two) (collectively, “FCS.”). The MDA required FCS to assume all costs of construction, operation, and maintenance of the four buildings. The City of Toronto waived the development charges.
19York and FCS then entered two leases, one starting in 2015 and the other in 2020. Each featured a separate 70-year term and a 35-year extension option. Article 4 of each lease made FCS responsible for all taxes, operating and maintenance costs, and utilities. Article 6 restricted FCS’ use of the property as “temporary accommodation housing facilities for the exclusive use of students at York University and/or Seneca College to be actually used and occupied for the Purposes of the University.”
20Entering the hearing, MPAC had misunderstood that s. 8.4 of the leases vested title in the buildings to FCS until lease expiration. This turned out to be based on a draft development lease attached to a December 15, 2014, addendum to the MDA. The actual leases, signed in 2015 and 2020, each stipulated that the buildings and improvements remained part of York’s freehold. York conceded that without this change in the lease wording, the applicants could not rely on the tax exemption.
21Phase One of the Quad houses 812 students with associated amenities. It was completed in August of 2017 for the 2017-2018 academic year. Phase Two houses 708 and was completed in the fall of 2022. Both phases saw full occupancy upon opening. Since completion of the buildings, FCS has subleased the residential units to students individually and collected rents. York has had no documented say in setting the rental rates. In 2024, FCS collected over $13 million in rental income and earned gross profit approaching $9 million. Beyond this, there was no accounting of FCS’ return on the investment for the building cost beyond the general assumption that it had not embarked on the venture to lose money.
22York now guarantees a spot in residence to all incoming first-year undergraduates. Its ability to attract graduate-level international students still suffers from the shortage of spots. It was not clear how York’s evidence on this point fit with the Government of Ontario’s announced requirement that universities extend guaranteed residence to all international students, beyond the presentation of a policy dilemma for the university’s administrators. York did not present the Quad as the panacea for its structural problems, but I drew the inference that the university’s on-campus experience would have fallen further into decline without the residences.
23York instituted this proceeding after MPAC issued it Property Assessment Change Notices in October 2023, for Phase One, and in November 2023, for Phase Two. The combined taxable assessed values totalled over $176 million. Although neither the notices or the assessments were in evidence, these facts were not in dispute and did not require adjudication beyond the request for general declarations that they be nullified and any paid amounts refunded.
24Pursuant to a February 4, 2025, Memorandum of Understanding, FCS is required to employ live-in York students under the supervision of professional staff trained in various disciplines such as suicide prevention, sexual violence response, conflict resolution, and community promotion; in other words, donships. I did not construe this development as having been conceived to bolster the applicants’ position in this property tax dispute. Rather, about two years after completion, York negotiated a better integration between its academic and non-academic administration with the operation of the Quad. York still has no internal management role in the Quad’s operations, but the long-term collocation has necessitated a degree of oversight by York and the establishment of a formal student peer and mentor network beyond building services such as security and maintenance.
25The Quad buildings have many functions and are integral to the Keele Campus. The two sides to this controversy presented the properties’ functioning from their perspectives. York focused on the administrative, academic, and personal support offered to residents. It oversaw the design and construction and continues to have high-level input into FCS’ management of the properties. In keeping with its statutory mandate under the Assessment Act, R.S.O. 1990, c. A.31, MPAC viewed the buildings qua properties. The FCS companies built it and now manage it as a property. They accepted all the financial risk, including capital and operational expenditures, staffing, and rent collection. These opposed perspectives on the accepted facts and events will inform the s. 18 analysis. Next, however, I will describe the applicable rules of statutory construction.
2. RULES OF CONSTRUCTION
26No special common law convention applies to the interpretive rules for s. 18, beyond Driedger’s modern approach to apply context, grammar, and legislative purpose to the ordinary meaning of words: Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, at para. 26. In Ontario, the Legislation Act, 2006, S.O. 2006, c. 21, Sched. F, ss. 63-64, also presumes the law is always speaking in the present tense, applicable to current circumstances, and remedial in nature. There are no special rules for reading taxing statutes, including exemptions: Diocese of Toronto Camps (Anglican Church of Canada) v. Municipal Property Assessment Corp. (2004), 246 D.L.R. (4th) 170 (Ont. C.A.), at para. 15.
27The degree of precision and detail characteristic of many tax provisions has motivated rigorous textual analysis: Placer Dome Canada Ltd. v. Ontario (Minister of Finance), 2006 SCC 20, [2006] 1 S.C.R. 715, at para. 21. This was more of an observation than a blanket rule, and I note that s. 18, as part of a private Act, only affects York’s property: Legislation Act, s. 91. Because of the long-term property tax implications of s. 18 to the Quad residence buildings, the parties have picked over every word to argue their positions.
28Although it is a private Act and not a general taxing provision, the wording of s. 18, appearing as s. 19 in the 1959 Act, is not unique. Its operative wording is identical to s. 21 of the University of Ottawa Act, 1965, S.O. 1965, c. 137, and some other private statutes establishing universities, hospitals, and other public institutions. On the point of use and occupancy for purpose, the consequence to other entities is sufficiently wide as to require s. 18 to be analyzed closely, as if it were a general taxing statute.
29These rules are complementary. They are interpretive aids meant to establish fairness and consistency. Even in the Court of Appeal’s brief oral decision in Donaldo, the focus on the grammatical structure of s. 18 demonstrated how the wording must prevail over preconceptions about tax policy. The paramountcy of operative wording over general policy considerations is a bedrock principle of Canadian law: Ross Southward Tire v. Pyrotech Products, [1976] 2 SCR 35, at p. 41.
3. APPLICATION OF SECTION 18
30In Donaldo, the only previous occasion in which the courts considered s. 18 in the context of York University, the Court of Appeal held that s. 18 did not exempt from business taxes levied by the Borough of North York (now amalgamated with Toronto) against private retail services providing basic services to York students in the Ross Humanities Building. The premises consisted of a bookstore, lounges, cafeteria, bank, drugstore, barbershop and beauty salon, optometrist, travel agency, a men’s and ladies’ wear store, cigar store (variety store), and a sports and dance centre store.
31The trial judge found that the use of these retail services by York students fit the purposes of the university. However, he could not find that the retailers, as occupants, furthered the purposes of the university as defined in the Act. However, he felt constrained to uphold the tax exemption, because the first clause of s. 18 did not state the purpose condition and operated separately from the second.
32The Court of Appeal overturned the trial judge’s interpretation of the conjunction “and” connecting the two clauses and required the York property to come within both clauses to qualify for the tax exemption. The trial judge had studied the two clauses and construed the word “and” as separating two separate exemptions. The Court of Appeal construed the whole section as a single exemption conditional on the use and occupation wording of the second clause. Applying the trial judge’s finding that the businesses would have failed the occupation for purpose requirement in the second clause, the appellate court concluded s. 18 did not exempt the retailers from municipal business tax.
33Because York did not ask me to distinguish or otherwise revisit the Court of Appeal’s reasons, delivered orally by Lacourcière J.A., I assumed the university has conceded the point regarding the single exemption. The balance of my reasons are devoted to the application of the second clause; namely, the use and occupation for York’s purposes.
34MPAC argued that York cannot satisfy the second part of s. 18, because FCS uses and occupies the residences. There is no doubt that the triple-net leases confer on FCS possessory and quiet enjoyment rights and impose on the tenant all financial and practical responsibilities of tenure of property. FCS uses and occupies the buildings for profit, ultimately to recoup its building costs and to provide returns for its enterprise and shareholders. Legally, FCS is a user and occupier for its commercial purpose in the way the retailers occupied the student mall in Donaldo. The apparently tidy logic cannot hold, because the passive “are … used and occupied” in the second clause does not restrict the user and occupier to anyone or require the holder of the head lease to be the sole user and occupier. This grammatical structure stands in contrast with the first clause, where “occupied by the University” refers to leaseholds in which York is the tenant.
35Because the lease restricts FCS to the sole permitted use of providing housing and facilities to students, the tenant is not at liberty to earn those profits other than by collecting rent or fees from students. This restriction imposes on FCS a defined class of sublessees who, in addition to FCS, are categorical users and occupiers. In contrast, the retailers in Donaldo were free to serve outside customers unconnected to York. The use of separate words for users and occupiers implies the necessity of both for qualification for the tax exemption. There are no legislated restrictions on the number of users and occupiers, beyond practicalities and administrative constraints. This means there can be more than one occupier in the way the university can enrol more than one student.
36On the number of occupiers, I observe that various Ontario laws use versions of that term harmoniously. One must read any legislation as part of the whole statute book, especially in the case of analogous legislation: Sullivan, R., The Construction of Statutes, Seventh Ed. (Toronto: LexisNexis, 2022), at pp. 412-13. Para. 4 of s. 3(1) of the Assessment Act employs the phrase “occupied solely by a university” to mean that the tax exemption would not apply if the premises were occupied by one or more entities including a university. The absence of the word “solely” in York’s statute thus implies the possibility of multiple and simultaneous occupancies.
37Although statutory occupier liability law is not related to property assessment, the Occupiers’ Liability Act, R.S.O. 1990, c. O.2, s. 1 recognizes the possibility of “more than one occupier of the same premises,” with occupation defined in terms of physical possession or responsibility. A neighbouring property owner can be considered an occupier of municipal land used predominantly by its customers, because the neighbour invites the customers to use the land: Moody v. Toronto (City) (1996), 31 O.R. (3d) 53 (S.C.). Similarly, the agreements and circumstances in this case can give rise to additional users and occupants beyond the long-term head lessee.
38In the case of the York statute, one construes from the legislature’s unrestricted wording of the use and occupancy of the property that the relation of the users and occupiers to the university’s purposes determines the tax-exempt status of the premises. Here, one readily identifies three classes of users and occupiers of the buildings from their roles and relations to York as a university. The most direct class consists of the student residents. That is obvious. Some generalities can be assumed regarding students’ privacy rights. An FCS employee could not enter a student’s unit without the occupant’s permission or as provided in the sublease. I presume each room has some form of keyed access. Even without keys, the employee cannot simply enter without at least knocking. FCS is an occupier, because it holds the head leases and employs staff to operate and maintain the buildings. Its security staff might have access to a skeleton key to enter rooms in emergencies. York is an occupier, not only because of its supervisory role, but also because it controls eligibility of the students and allocates residence availability according to its institutional priorities and policies. Not only does York admit students, but it can also expel them and cause them to lose the right to be subtenants.
39The multiple occupancies of the residences distinguishes them from the service businesses in Donaldo. A student getting their hair cut might be a mere invitee, but a resident has a right of occupancy. The appellate result in Donaldo turned on the meaning of the word “and” separating the two clauses. In reaching that conclusion about the conjunctive reading of the two clauses, Lacourcière J.A. harmonized the interpretation with the inclusion of the phrase “for the purposes of a university” in para. 4 of s. 3 of the Assessment Act. I read his reference to s. 3, in obiter, to support his reasoning that the purpose clause in s. 18 of York’s statute governed the entire section. I did not read his decision in Donaldo as having overlaid upon s. 18 the same meaning as s. 3. At that time, para. 4 of s. 3 contained a requirement that the buildings be “used and occupied by such institutions.” (The current s. 3 is even more restrictive, in requiring sole occupation by the university.)
40Even if I am wrong in distinguishing Lacourcière J.A.’s harmonization of s. 18 with other university exemptions in Ontario by restricting it to the construction of the conjunction, I find support for a non-exclusive and disjunctive interpretation of the second clause’s use and occupation requirement in his reliance on the trial judge’s findings. These findings, reported at 13 O.R. (2d) 601, at pp. 603-604, made this clear (bold font added):
There are about 3,000 resident students, many in self-contained apartments. The campus is isolated and subject to severe weather conditions in winter. Alternative shopping is not readily available and there is a security problem for the students. I came to the conclusion that the drug-store, barber shop, beauty salon, optometrist, travel agent, cigar store and sports and dance centre, were necessary and actually used for the purposes of the university. No one was called from the men and ladies’ wear store and, although I would think that such a store would be a convenience, I would not think it would be necessary for the purposes of the university. I should say that the cigar store is really a grocery store and that about 50% of the travel agency business consists of accounts directed to the various faculties for the travel of faculty members. I would have concluded, however, that none of the premises above referred to are “occupied” for the purposes of the university. The stores were operated by the occupants for profit and for the purposes of the occupants and for this reason also I would have concluded that the occupants were still liable for business tax.
41In Donaldo, the students using the services could not be considered occupants. Neither could the university. Beyond standard restrictions and rights of entry in the lease, the trial judge was correct to hold that the businesses occupied the retail units in the same way they would occupy units in a private shopping mall. What distinguishes the Quad residences from the retail units in Donaldo is the multiple simultaneous occupancies that could fit York’s legislated purposes.
42The inclusive effect of the passive wording of the use and occupation provision in the second clause of s. 18 therefore could not, as MPAC urged, support analogies to decisions applying s. 3 of the Assessment Act, the most pertinent being Loyalist College of Applied Arts and Technology v. The Municipal Property Assessment Corporation, 2014 ONSC 7152, 330 O.A.C. 52 (Div. Ct.). In that case, the Divisional Court interpreted the word “solely” in s. 3 as having required a high level of exclusivity in occupancy and use. After finding student housing incidental to Loyalist’s purpose but central to the private lessee, the court held:
Upon entering into that commercial arrangement, Loyalist lost its specific exemption under the Assessment Act for the land because it no longer solely occupied the land.
43The trial judge’s reasoning in Donaldo, adopted by the Court of Appeal, demonstrated how the use and occupation clause in s. 18 of York’s statute permitted multiple occupiers of the same property. In fact, a plain reading of s. 18 permits York to maintain the exemption, even if FCS were the sole user and occupier, provided such use served the purposes of York. Because of my finding that the students and York also used and occupied the properties, I need not enter a focused inquiry into the derivative purposes of FCS’ operations. MPAC’s argument that FCS’ leasehold and operational occupation of the Quad buildings make it the sole or dominant occupier therefore fails to see the multiple occupation of buildings all connected by a relation to York as a university.
44Once one reads the second clause of s. 18 as being governed by purpose and not by the identity of the user or occupier, the use and occupation “for the purposes of the University” become almost axiomatic. For the sake of completeness, however, I will review how those purposes were defined.
45The legislature endowed the university independence from taxation to test the limits of its aspirations by defining its purposes, divided between the abstract and the practical:
- The objects and purposes of the University are, (a) the advancement of learning and the dissemination of knowledge; and (b) the intellectual, spiritual, social, moral and physical development of its members and the betterment of society.
46Both ss. 4 and 18 referred to the purposes of “the University” the capitalized proper noun defined s. 1 as “York University.” This is not the generic “university” used in s. 6 to describe the ordinary meaning of a place of higher learning and research conferring degrees, diplomas, and certificates. Importantly, the development of its members includes a social aspect.
47MPAC did not challenge the evidence in Mr. Kishinchandani’s affidavit and exhibits of the internal processes resulting in the construction and management of the buildings, or the admissibility of the various reports and studies. I did not accept the evidence regarding the needs, feasibility, and contribution of first-year residential enrolment to academic success as proof of the validity of those facts, either as general truths or as justifications for the project. The court’s role in this proceeding is not to decide in the abstract whether student residences are integral to a university in 2026. York determined for its own purposes, through exhaustive deliberation, that they are. For example, it matters not whether the premise that on-campus residence leads to higher grades and to lower dropouts is valid. For determining purpose, it suffices that York was driven by such aims to develop the Quad.
48MPAC cautioned against reliance on references in the MDA and leases committing FCS to York’s Housing strategy and to York’s “Objects and Purposes.” I agree that the documentation must be read objectively, albeit through a purposive lens. Subjective or self-serving words cannot be used to characterize the commercial reality: London Jewish Community Village v. The Municipal Property Assessment Corporation, Region 23 et al., 2020 ONSC 6794, 12 M.P.L.R. (6th) 272, at para. 24. In fact, I agree that the operative provisions of the MDA and leases could have been used for any type of large property development, with few alterations. One should expect the MDA and commercial leases to deal with the building construction and management.
49Stopping at the function of these documents to inform purpose is an artificial interruption of the analysis at the point of utility. The buildings had to be built. They have to be run. What must drive the issue of purpose is the historical and ongoing necessity for building the Quad complex. Purpose, not utility, defines the second clause of s. 18. Purpose denotes service beyond intrinsic usefulness. The question why the university had them built is more relevant than their status as buildings.
50This point does not mean York has a licence to determine whether the properties are used and occupied for the purposes described in s. 4. The court must scrutinize the decision path that York chose. The only evidence available was that of York’s representative that York commissioned FCS to build, lease, and operate the residences to transform the character and the functioning of the institution. It is not enough to consider the Quad as MPAC sees the properties. One must see them as part of York’s world.
51In York’s world, an English professor might buy a crate of juicy apples to distribute during a lecture on Paradise Lost and later submit the expense for reimbursement. Unfamiliar with the teaching value of sharing Adam and Eve’s experience with fruit as described by Milton, a financial controller might reject the chit because of a policy against paying for snacks.
52Here, MPAC’s focus on the buildings’ economic utility to FCS misses the point that the court must concern itself with their purpose for York, not FCS. It would be unfair to stereotype a property assessment agency’s apparent focus on the buildings qua buildings, because that focus serves its purpose. That MPAC viewed the buildings solely in terms of their function in FCS’s business is immaterial. The arguments informed by this perspective, however, fell short of informing the building’s purpose in relation to York. York disclaimed financial responsibility but did lease property to FCS, in exchange for building and maintaining a live-in extension of the university’s learning and social environment.
53MPAC’s dismissal as incidental any purpose for the Quad residences beyond places to sleep and feed could have been a more valid idea, had York engaged FCS to build them a mile away. On campus, the buildings fulfil York’s s. 4(b) mission to its members’ experiential learning through mentorship and personal crisis management, off-hours access to resources and laboratories without insecure commuting, and independence from parental surveillance. Indeed, students living in proximity to each other and to these resources could come within the s. 4(a) purpose of “the dissemination of knowledge.” This characterization is consistent with the County Court’s decision in Re University of Ottawa and City of Ottawa Re Carleton University and City of Ottawa (1969), 2 O.R. 382. The court held, at pp. 384-385, that the student residence’s primary purpose was not to house students but rather to provide a collaborative space for interdisciplinary collaboration and study. It was only a dormitory when the students were asleep.
54MPAC submitted that granting FCS an exemption would extend tax relief to a private company already responsible for taxes under its lease. Tenants’ liability for tax is standard wording for inclusion in a triple-net lease and further absolves the lessor of responsibility of all operating expenses of the property. FCS’ liability to pay any tax liability of York’s property ownership does not create liability or cause York to lose a tax exemption.
55Imposing on York a tax liability to be transferred to FCS could then result in the expense being transferred to the subtenant students. Since demand for spaces far outpaces supply, perhaps the only effect of raising the cost to students of attending York that way would be to make the community less financially diverse. Whether such monetized microeconomic outcomes would serve or burden the public interest is not for the court to decide. The court cannot impose restrictions on the meaning of s. 18 to pit the interests of Toronto ratepayers against the three stakeholders of the Quad buildings. The question whether s. 18 exempts York from property tax on the residences is strictly an exercise in statutory construction and application. The answer must be that the buildings are used and occupied for the purposes of York University. They are exempt from assessment for City of Toronto property tax.
CONCLUSION AND COSTS
56I grant the application for a declaration that the portion of the buildings of the Quad Student Housing Complex used for student housing are exempt from City of Toronto property tax and shall remain exempt as long as their use and occupation remain unchanged.
57I further order the City to cancel and/or refund all amounts paid or payable on account of property taxes with respect to the portion of the Quad Student Housing Complex used for student housing.
58The applicants’ counsel shall prepare a draft judgment for MPAC’s counsel’s approval, for signing by the registrar.
59I urge the parties to agree on costs. If the parties cannot agree, the applicants may file a bill of costs and costs submissions of three pages or less within 14 days. MPAC may then submit its costs submissions of three pages or less, within 14 days thereafter. There are no costs for or against the City of Toronto.
Akazaki J.
Released: February 25, 2026
York University, et. al. v. M.P.A.C., et al., 2026 ONSC 755
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
YORK UNIVERSITY, FCS HOLDCO INC., and FCS HOLDCO P2 INC.
Applicants
– and –
MUNICIPAL PROPERTY ASSESSMENT CORPORATION and the CITY OF TORONTO
Respondents
REASONS FOR JUDGMENT
Akazaki J.
Released: February 25, 2026
1 Nevertheless, York does pay tax to the City pursuant to the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A, s. 285(1). It is not a property tax, but rather a levy based on a prescribed amount for each full-time student enrolled in the university, regardless of their abode. The s. 285(1) levy is payable “Despite any Act.” Its operation is akin to the Retail Sales Tax Act, R.S.O. 1990, c. R.31, s. 1.1 override of s. 21(1) of the Sunnybrook and Women's College Health Sciences Centre Act, 1998, S.O. 1998, c. 12 – worded identically to s. 18 of York’s statute. See: Sunnybrook and women's college health sciences centre v. Ontario, 170 O.A.C. 107 (C.A.), at paras. 46-48.
2 Despite the earlier statute, all references to the “Act” are to the 1965 version.