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Ontario Tax - Assessment Act - 'Omitted from Tax Roll'

. Drewlo Holdings Inc. v. Municipal Property Assessment Corporation

In Drewlo Holdings Inc. v. Municipal Property Assessment Corporation (Div Court, 2023) the Divisional Court considers the application of s.33 Assessment Act, the 'Change re land omitted from tax roll' provisions:
The ruling in Shane B

[53] Drewlo submits that if MPAC had the authority to issue the October omits, then the Board erred in not following the decision in Shane B, which held that omits can only correct an omission, they do not confer on MPAC the authority to reassess land that already has a current assessment.

[54] Drewlo points to the decision in Shane B (Toronto (City) v. Municipal Property Assessment Corporation, 2013 ONSC 6137, 315 O.A.C. 279 (Div. Ct.)), in which this court answered “no” to the question whether MPAC or the Board could use omitted assessment powers to “alter the property’s current value if there has been no physical change to the property?” On Drewlo’s argument, if MPAC had the authority to issue omits for the new condo units, the precedent of Shane B required that the same total market value be maintained, as nothing in the physical description of the Property had changed since the May omit.

[55] Shane B involved the severance of portions of tax-exempt properties belonging to a church and a school, and the sale of the severed parcels to a private owner for development. Thus, the Shane B decision properly dealt with s. 33(3) of the Act, which is concerned with an alteration in the status of a property from being tax exempt to requiring the payment of taxes. At para. 37, the court held that MPAC was limited by the provision to correcting the tax status as it was only the taxable status that had been omitted, and not the assessment. MPAC was not entitled to correct the current values, because the properties had already been assessed, even if at the time the property could not be taxed.

[56] Drewlo submits that this interpretation is consistent with Magee, in para. 9 of which the court distinguished between land and its legal description. But in my view, in these respects, Shane B is consistent with East of Bay and Re Beaver Lumber and is distinguishable from this case for the same reason. In the circumstances of this case, the condo plan created new land, land that therefore had been “omitted” and needed to be assessed. The Property had been fundamentally reconfigured by operation of law into 330 individual residential condo units and a single multi-residential tower. The May omit was with respect to a different legal property, a property that had not seen itself yet transformed for tax purposes into 331 new parcels.

[57] In East of Bay, the Divisional Court held that what prevented resort to s. 33(1) was the fact that separate roll numbers had already been assigned to each dwelling unit in the building (at para. 6). That is precisely where this case differs from East of Bay, and what permitted MPAC to issue the October omits here. New land had been created in September 2019 after the May omit, which altered the assessment roll by the addition of 331 new roll numbers and individual property descriptions that had to be accounted for.

[58] This ground of appeal fails.
. Drewlo Holdings Inc. v. Municipal Property Assessment Corporation

In Drewlo Holdings Inc. v. Municipal Property Assessment Corporation (Div Court, 2023) the Divisional Court considered (and dismissed) an appeal from a decision of the Assessment Review Board, here regarding the 'Change re land omitted from tax roll' provisions of Assessment Act [s.33]:

[1] The appellant Drewlo Holdings Inc. (“Drewlo”) developed the property municipally known as 750 Capulet Lane in London, Ontario, by constructing three residential apartment towers, each containing 165 units. In December 2018, the appellant registered a condo plan that converted two of the three towers into 330 condominium units. The third tower was to remain a multi-residential building.

[2] The respondent Municipal Property Assessment Corporation (“MPAC”) issued an “omitted assessment” (an “omit”) against 750 Capulet Lane in May 2019 as a single parcel of land with three multi-residential towers of a value of $68,410,000, using s. 33(1) of the Assessment Act, RSO 1990, c. A-31 (the “Act”). An omit is used to assess land liable to assessment that has been omitted from the tax roll. In October 2019, because of the condo plan, MPAC issued further omits, but this time for the 330 individual condo units in the two towers as 330 residential assessments, and one more for the remaining multi-residential tower, for a total of 331 assessments. The assessment for the original property was adjusted to $0.

[3] Drewlo appealed what MPAC had done with respect to these now 331 assessments to the Assessment Review Board (the “Board”), which upheld MPAC’s actions.

[4] On leave of this court, Drewlo appeals the Board’s decision, arguing that the Board misinterpreted, ignored, or misapplied s. 33(1) of the Act, and improperly ignored MPAC’s deliberate misdescription of the land in its first assessment, which calls into question MPAC’s legitimate ability to assess the property at 750 Capulet Lane with the omits in October. Drewlo also argues that in the process, the Board deprived Drewlo of procedural fairness by not inviting its submissions on the issue it decided was determinative, and by preferring other facts to the facts that Drewlo endorsed.

[5] For the following reasons I would dismiss Drewlo’s appeal.


Section 33(1) of the Assessment Act

[26] Section 33(1) of the Act sets out how lands that are omitted from assessment are to be dealt with to correct the tax roll during the tax year and is central to the grounds of appeal. I include its relevant provisions:
33(1) The following rules apply if land liable to assessment has been in whole or in part omitted from the tax roll for the current year or for all or part of either or both of the last two preceding years, and no taxes have been levied for the assessment omitted:

1. The assessment corporation shall make any assessment necessary to correct the omission.

2. If the land is located in a municipality, the clerk of the municipality shall alter the tax roll upon receiving notice of the change, and the municipality shall levy and collect the taxes that would have been payable if the assessment had not been omitted.
[27] In the interpretation of this provision, as in the Act as a whole, there are two competing primary objectives: correctness and finality. To ensure that the tax burden is equitably distributed, the assessment roll must be correct. Fairness to the taxpayer requires some finality, to ensure a stable and reliable tax base: Toronto (City) v. Municipal Property Assessment Corporation, 2013 ONSC 6137, 315 O.A.C. 279 (Div. Ct.), at para. 30 (“Shane B”).

[28] This provision does not confer a general authority to review all errors in the valuation of property but is aimed at correcting a situation where some or all of a property was omitted from the assessment roll: Shane B, at para. 44.


The decision of the Board

[18] After considering the factual background, the Board properly stated that the issue on the appeal before it was whether MPAC had the authority to issue the October omits under s. 33 of the Act, which requires that land liable to assessment have been omitted in whole or in part. That issue required a determination of whether the condo plan had created “new land” that had not previously been assessed.

[19] The Board reviewed jurisprudence and noted that s. 33 cannot be used to reassess land for which a current value has already been assessed. The Board observed that in the circumstances of this case, the May omit had merely changed the current value of the Property based on the construction of three towers. The Board then went on to hold that MPAC had the jurisdiction to correct the legal description of land resulting from the creation of new lands, and then to use s. 33 to add the new lands and their assessments to the roll.

[20] The Board held that this all hinged on whether the registration of the condo plan created new lands to be added to the assessment roll. If not, then there would be no omission on the assessment roll to correct.

[21] After considering various sections of the Act, the Board concluded that land which is subject to assessment is “land/real property/real estate/property to which a right of ownership applies.” Severance creates new parcels to be assessed separately against each owner. Then, based on provisions in the Condominium Act, the Board held that condo units were real property, and therefore “land” under the Act. The registration of a condo plan created new rights of ownership for each unit, which is a separate parcel for the purpose of municipal assessment and taxation. The severance occasioned by the registration of the condo plan also created a new property in the third multi-residential tower, which required assessment under a new roll number.

[22] Accordingly, the registration of a condo plan did create new “lands” that obligated MPAC to resort to the use of s. 33 of the Act, to “correct” the omitted lands. Drewlo’s appeal was dismissed.


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Last modified: 10-02-24
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