12/20/2013


The Parliamentary Assistant to the Minister of Finance, Steven Del Duca, MPP has completed his report regarding special business property assessment.

The report was released on the website of the Ministry of Finance on December 17, 2013.

The report includes 26 recommendations related to the operation of MPAC and the assessment system.  The recommendations are made under the following headings: accountability, roles and responsibilities, methodology for special business properties, data accuracy and integrity and appeals.
In addition, the report makes a number of recommendations related to specific property types.  Below are key extracts from each:

Billboards – “It is recommended that billboards be assessed based on their structure cost without an added value for land rental. It is recommended that this valuation approach would apply starting in 2014. Consideration could also be given to retroactive application of this valuation approach for signs that have been newly-assessed since the 2008 reassessment.”

Landfills – “It is recommended that MPAC’s capacity approach should not be applied to any additional landfill properties before the 2016 reassessment.  It is recommended that Ministry staff continue the consultation process and arrive at a recommended valuation approach by the summer of 2014”.
Industrial Lands - “MPAC’s valuation procedures should be prepared and made publicly available well in advance of the next province-wide reassessment of properties in 2016.  It is also recommended that consideration be given, with municipal input, to providing greater regulatory clarity regarding the circumstances when a change or proposed change in zoning or official plan designation should impact the assessment approach.”

Farms - “Improve the sales verification process by ensuring that analysis of farm sales reflects only sales between bona-fide farmers.   Strengthen the accuracy and equity of the valuation process by ensuring that an adequate sample size is used for farm sales analysis.”

Grain elevators - “It is recommended that the property class regulation under the Assessment Act be amended for the 2014 tax year based on the following criteria:

  • Commercial classification to apply to licensed commercial grain elevators located off farms;
  • Split commercial/farm classification to apply to grain elevators located on farms that are licensed for commercial use and store both the farmer’s own grain and that of other producers (classification split to be based on the proportion of customer to farmer grain handled at the elevator); and
  • Farm classification to apply to grain elevators located on farms that are used to store only the farmer’s own grain”.
Wind Turbine Towers - “Starting in 2014… it is recommended that the amount of the [assessment] increase be based on the province-wide average increase in the assessed value of industrial properties. For the 2014 to 2016 tax years, the increase would be approximately 3% per year.  Beginning in 2017, and with every four-year reassessment, the amount of the increase for wind turbine towers would be updated to reflect the province-wide average assessment increase of the industrial property class, phased in over four years.”

Mills - “In a limited number of cases, the Province will be providing one-time financial assistance that is targeted to municipalities most adversely affected by the reduced assessed values resulting from the recent ARB decisions.  In 2014, municipalities will be able to make use of property tax and other policy tools currently available to them to help to mitigate the impacts on their tax base.  For example, in certain situations, municipalities could make use of tax flexibility tools to mitigate the impacts of assessment reductions going forward.”

A full copy of the report is available here and includes background information and a full listing of all recommendations made by the Parliamentary Assistant to the Minister of Finance.

AMO has posed some key questions to the Ministry of Finance regarding the report, its recommendations, and implementation.  AMO will continue its analysis together with the municipal finance associations.