Big-Box Assessment Appeals
Are A Study In Unfairness
By Cynthia Townsend
Re: “Why Northern Municipalities Struggle with Canadian Tire Reassessment Bills,”
Municipal Monitor, Q2.
I
t was with great anticipation that
I read Johnnie Bachusky’s article
in the last issue of the Municipal
Monitor. For us, this is nothing new.
Espanola and Dryden were almost fa-
mous when the Assessment Review
Board (ARB) sided with the pulp and
paper industry in 2013, resulting in
retroactive amounts due of approxi-
mately 70 per cent of our annual levy
and an ongoing decrease in taxation
revenue of approximately 15 per cent.
We too have been subjected to the
Canadian Tire appeals, which have
seen a 50 per cent reduction in value
between the original 2012 returned
value by the Municipal Property
Assessment Corporation (MPAC) and
the new 2016 value. MPAC has three
main approaches to value: 1) the com-
parable sales approach; 2) the income
approach; and 3) the cost approach.
Big-box stores argue that there are
no sales of similar stores for which
to apply this approach and MPAC
10
Q3 2017 www.amcto.com
accepts this. These big-box stores
flip-flop on a cost versus income
approach, based upon whatever value
is lower, and therefore they mini-
mize the amount of taxes due to the
municipality. Canadian Tire is a very
interesting example. Most of their
stores are included in a real estate
investment trust, yet for MPAC’s valu-
ation purposes the income approach
isn’t valid — irony at its best. So the
approach that is generally accepted
is the cost basis, where accelerated
amortization rates are the norm based
upon sales of properties. Remember
that sales were not satisfactory for a
valuation approach; however, sales
of defunct stores with restrictive
covenants can be used to argue for
accelerated amortization.
The role of the municipal
working group should also be of par-
ticular interest to municipalities.
Other parties consider the accep-
tance by this group to reflect all of the
“
MPAC needs
to work harder
at returning
values that
municipalities
can rely upon.
Continued on Page 12