3.01 Assessment Review Board and Ontario Municipal Board

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3.01 Assessment Review Board and Ontario Municipal Board Chapter 3 Ministry of the Attorney General Section 3.01 Assessment Review Board and Ontario Municipal Board Our audit of the Review Board found that it was 1.0 Summary taking longer to resolve appeals than its targeted times and had about 16,600 appeals outstanding as of March 2017. Many property owners are wait- In Ontario, boards and tribunals are created by the ing years (1,811 appeals have been outstanding provincial government to facilitate mediation or for more than four years) for their assessment make decisions independent of the government set- appeals to be settled, which leaves them at risk tling disputes between people or disputes between of not receiving a property tax refund in a timely people and the government. Because the boards manner if a decision is finally rendered in their and tribunals hear evidence, engage in fact-finding, favour. These delays can be particularly onerous for and make decisions that affect personal rights the municipalities because they rely on property taxes way a court does, they are known as “quasi-judicial” Chapter 3 • Section 3.01 to fund their operating budgets. Being required to agencies. The cases they hear are decided by board refund millions in property taxes can cause finan- members, called adjudicators, and the process is cial difficulty for smaller municipalities. known as adjudication. Our specific concerns related to the Review Our audit focuses on the operations of the Board are as follows: Assessment Review Board (Review Board) and Large backlog of unresolved appeals the Ontario Municipal Board (Municipal Board), • continues, with some appeals dating back which form part of Environment and Land to 1998. Despite the decrease in the total Tribunals Ontario. number of appeals received since 2009, the Review Board has been struggling to elimin- Assessment Review Board (Review Board) ate its backlog. As of March 2017, we noted The Review Board hears appeals mainly about resi- that the Review Board still had approximately dential and non-residential property assessments 16,600 unresolved appeals, which were and classification. The Municipal Property Assess- close to three times higher than the 5,830 ment Corporation (MPAC) assesses and classifies outstanding appeals that it considered all properties in Ontario, which affects how much acceptable. While 14,790 appeals have been property tax owners must pay to municipalities. outstanding for four years or less, the Review If property owners dispute a property assessment Board could not provide us with a breakdown from MPAC, they can appeal to the Review Board. of these appeals between residential and 81 82 non-residential appeals but informed us they discretion of the Review Board. Because the were largely non-residential. The remaining Review Board chose to publicly report the 1,811 appeals have been outstanding for more number of original appeals and the deemed than four years, of which 564 of them have appeals together, the number of appeals been outstanding between eight and 19 years. received (32,000) reported in its annual Of the 1,811 appeals, about 1,740 (or 96%) report were overstated as much as 507% (the of them were non-residential appeals and the actual number of original appeals received other 70 (or 4%) were residential appeals. was 5,272) in 2015/16. • Delays in resolving large-dollar, non-resi- • The Review Board does not conduct quality dential appeals have created uncertainty reviews of members’ oral decisions. At the for small municipalities. Delays in resolving conclusion of a hearing, board members use high-dollar assessment appeals negatively their professional judgment, based on the impair the small municipalities’ ability evidence presented, to render either an oral to manage their fiscal affairs because the decision or issue a written decision at a later property taxes generated from these non-resi- date. Oral decisions represent approximately dential properties cover a significant portion 80% of all board members’ decisions. Unlike of their communities’ tax base. For example, written decisions, oral decisions are not sub- the Review Board took approximately one- ject to peer quality assurance review. and-a-half years and four years respectively • The decision-making process by board to resolve two non-residential appeals. The members could be more transparent. outcome of the Review Board’s decisions sig- Decisions are discretionary: members exer- nificantly reduced the assessment value of two cise their professional judgment based on properties located in two small communities. the evidence provided, and the majority of Both municipalities were required to refund a residential and non-residential appeals are total of $10.7 million in property taxes previ- decided orally by a single board member. But Chapter 3 • VFM Section 3.01 ously paid by the property owners during the the Review Board does not audio record its 2009 to 2012 taxation years. hearings to allow for preserving the hearing • Annual caseload statistics reported to for internal reviews, following up on com- the public have been overstated for many plaints, protecting members from allegations years. The Assessment Act (Act) provides that of misconduct, serving as a memory aid for a person may file an appeal in any year of the members when writing their decisions, and four-year property assessment cycle. When an aiding evaluations of members’ performance. appeal is filed for a taxation year, but is not • The actual work time reported by the resolved in that taxation year, the Act stipu- Review Board’s full-time members is not lates that the appellant is “deemed to have consistent or analyzed. The Review Board brought the same appeal” for each subsequent does not have a formal policy requiring its year in the assessment cycle, which is called full-time members (12) to record how the a “deemed appeal.” The Review Board will members spent their work hours. However, automatically create a new appeal for the next board members do have a practice of com- tax year and repeat it until the end of the cycle pleting timesheets, but they were completed if the appeal is not resolved earlier. Although inconsistently. Also, we noted that between the deeming rule is defined under the Act, 2013 and 2016 about 1,540 hearings were determining which set of numbers and how cancelled three or fewer days before the hear- the numbers should be presented are at the ing dates. Due to the short notices, it was very Assessment Review Board and Ontario Municipal Board 83 difficult for the Review Board to reassign the Ontario Municipal Board (Municipal Board) full-time members to other hearings. We were The Municipal Board hears appeals primarily informed that the full-time members would related to a wide range of land-use planning mat- perform other duties, such as decision writing ters, such as amendments to municipalities’ Official and/or other special assignments. However, Plans and zoning bylaws, and minor variances. A since there are no requirements for the full- minor variance is when a property owner asks a time members to consistently record how they municipal Committee of Adjustment for permission spend their time, when their time became free to not meet a zoning bylaw, such as to place a shed after the short-notice cancellation of hearings, where it does not meet setback requirements on the there was no formal record supporting how property. If owners are denied the minor variance, that freed-up time was spent. they can appeal to the Municipal Board. Appeals • Evaluation of the Review Board’s overall on cases other than minor variances, such as an performance needs improvement. The amendment of an Official Plan to permit property Review Board reports publicly on only two developments, are usually more complicated and performance measures: timeliness in resolving take longer to resolve. residential appeals (non-residential appeals In June 2016, the Ontario Government are not included); and timeliness in issuing announced a comprehensive review of how the a decision. Overall performance measures, Municipal Board operates and its role in the such as users’ satisfaction and cost per appeal Province’s land-use planning system in an attempt recommended by the Ministry of the Attorney to make it more affordable and accessible to all General in 2015 were not reported. Ontario residents. In May 2017, the government • Board members ranked low during a introduced Bill 139. If the bill is passed, the Munici- recruitment competition were appointed. pal Board would be re-named as the Local Planning The Adjudicative Tribunals Accountability, Appeal Tribunal (Appeal Tribunal). One of the key Governance and Appointments Act, 2009 proposed legislation changes related to complex Chapter 3 • Section 3.01 requires that the selection process for the land-use planning appeals is that the new Appeal appointment of members to an adjudicative Tribunal would only be able to overturn a munici- tribunal be competitive and merit-based. We pal decision if it does not follow provincial policies found that it was not always clear that the or municipal Official Plans. The government’s selection process was followed. For example, review is discussed further in Section 2.4.4. in 2014, the Review Board re-interviewed Over the last several years, the public, including and subsequently appointed three of the citizens and municipal councils, have criticized 17 unsuccessful candidates from the 2013 that Municipal Board decisions lacked objective recruitment competition using a different and clear rationale, especially when the Municipal panel. The Review Board’s correspondence to Board rendered decisions in overturning sections the Ministry of the Attorney General indicated of municipal Official Plans. Also, citizen groups that these candidates had placed highly in the complained that they lacked a level playing field 2013 competition. However, board documen- when appealing against complex land-use propos- tation did not support this as two of the three als from developers.
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