.png)
Our previous blog introduced the burden issue under the Assessment Act (the “Act”) and highlighted the real issue: What does it mean to “lose” if MPAC fails to meet its burden of proving current value? In this installment of Properly Taxed, we will look at why the Legislature placed the burden of proof on MPAC in cases before the Board.
As previously noted, subsection 40(17) of the Act states that “where value is a ground of appeal, the burden of proof as to the correctness of the current value of the land rests with” MPAC. That subsection was added to the Act in 2008, under legislation that changed the Act for the 2009 tax year.
There were a number of changes made in that amendment, including shifting the burden. The Government introduced that legislation in response to an important report from the Ontario Ombudsman in 2006. In a report entitled Getting it Right, the Ombudsman outlined various issues with how property taxes were determined and litigated in Ontario. Of interest here are his comments on the burden of proof.
Getting it Right notes that historically the taxpayer had the burden of proving MPAC’s assessment wrong when it appeared before the Board. The taxpayer holding the burden fits with a scheme where there is a set default and the challenger to the status quo has to prove the status quo is wrong. But the report lists five reasons why the burden should properly be with MPAC:
- The taxpayer is not making a claim against MPAC;
- Taxes impose on individuals so the state agent, MPAC, should hold the burden;
- It is not reasonable to assume the assessment is correct because it is guesswork on MPAC’s part and if “the degree of inherent accuracy is a consideration, it supports MPAC having to justify its assessments;”
- There is no decision appealed from, “no one has yet decided MPAC is right; only MPAC has;” and
- MPAC has all of the information, so should be required to use that to prove its case.
Those are compelling reasons to place the burden on MPAC and the Government clearly agreed in its amendments to the Act.
The recommendation came from the Ombudsman’s comparison to the Manitoba Municipal Assessment Act, CCSM c M226, which has had the burden on the assessor in section 53 for some time. It is unclear from our review of the Manitoba caselaw if there is a similar tension between finding the correct current value and placing the burden on the assessor when the evidence is insufficient.
Notwithstanding the compelling reasons to place the burden on MPAC, there is a practical difficulty that remains: What happens when there is insufficient evidence to prove the current value of a property? That is, what happens when MPAC “loses”?
In Jay Patry Enterprises Inc. v Municipal Property Assessment Corporation, Region 05, 2018 CanLII 70338 (ON ARB) the Board proposed a system of reverting to the last uncontested assessment. But that framework has essentially been rejected by the Divisional Court decision in Municipal Property Assessment Corporation v. Zarichansky, 2020 ONSC 1124 (CanLII) (“Zarichansky”). Pursuant to the Zarichansky decision, the Board must determine current value.
As we will explore in future blogs, the problem is that in some cases, there is simply not sufficient evidence for the Board to make such a determination. We will be profiling cases that highlight some difficulties in the approach taken by the Divisional Court in Zarichansky.
