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On January 6, 2025, the Ontario Court of Appeal denied the Municipal Property Assessment Corporation (“MPAC”) leave to appeal Municipal Property Assessment Corp. v. Bell Canada, 2024 ONSC 3670 (CanLII) (“Bell Canada”).
Bell Canada was an appeal of the decision of the Ontario Assessment Review Board, dated January 19, 2023, in Bell Canada v Municipal Property Assessment Corporation, 2023 CanLII 3033 (ON ARB) (the “Board Decision”).
The issue in that case was the value of a six-storey building in downtown Toronto that was used as a switching station by Bell Canada. As a telecommunications facility, it could not be leased or sold with CRTC approval pursuant to subsection 11(2) of the Bell Canada Act, SC 1987, c 19. Bell Canada appealed the assessment of the property to the Board.
In the Board Decision, the Board valued the property on the cost approach to value at $38,938,000, see paragraph 61 of the Board Decision. The Board was then required to determine if that value was equitable with the assessments of other properties in the vicinity.
In considering equity, the Board cites the leading case of Municipal Property Assessment Corporation v Loblaw Properties Limited, 2017 ONSC 1299 (CanLII), where Divisional Court directed that an equity comparison should look to “all points of comparison”, see paragraph 23. In the Board Decision, the Board held that another switching station in downtown Toronto, also owned by Bell, was the most similar property in evidence, see paragraph 70 of the Board Decision. The Board found the only difference between the two properties was that the other property was larger than the one before the Board. The value of that property was settled on consent before the Board. The Board applied the land value per foot of the comparable to the property before it and found that the equitable assessment was $21,509,000, see paragraph 73 of the Board Decision.
MPAC was granted leave to appeal that decision, see Municipal Property Assessment Corp. v. Bell Canada, 2023 ONSC 3622 (CanLII).
In Bell Canada, Justice Lococo, writing for the Court, dismissed MPAC’s appeal. MPAC argued that the Board had erred because it did not look at all points of comparison in selecting the one comparable property, and because it did not address the “level of assessment” of the comparable property. On the first point, MPAC argued that there was another switching station in evidence and that there were other similar properties. On the second point, MPAC argued that an equity adjustment can only be done if the assessment is compared to a sale of a property. That is, there must be evidence that the assessment is wrong, based on market data. MPAC’s arguments are set out at paragraphs 29 to 36 of Bell Canada.
Justice Lococo found that the Board made no error in identifying one comparable property. He found that the Board applied the correct test, and identified a number ways in which the other switching station was comparable, see paragraph 39 of Bell Canada.
On the second of MPAC’s argument, the Court notes that its earlier decision in Municipal Property Assessment Corporation v Schumacher et al., 2016 ONSC 3239 (CanLII), had already determined that the level assessment analysis is not required for an equity adjustment, see paragraph 50 of Bell Canada.
While the Court in Bell Canada did state that the unique nature of the property there justified the special treatment, this case affirms that there can be many ways to show that there is an inequity in the assessment of a property. An assessment to sale ratio study is powerful evidence of equity, but one very comparable property can change that analysis in the right circumstances.
NextGenLaw LLP can help you frame creative equity arguments and assist with other property tax problems. Contact us today.
