Cornwall sues MPAC over warehouse assessments
Cornwall forced to refund taxes after 'negligent' evaluation by provincial property assessor
The City of Cornwall is suing Ontario's property assessor, claiming it was negligent when it overvalued three distribution warehouses, sending the municipality's budget into disarray.
The city had to refund $260,000 in taxes it collected from the sprawling Shoppers Realty Inc. distribution centre on Optimum Drive. It expects it will also have to reimburse Walmart for two of the company's warehouses.
"That's a big chunk of our tax revenue taken away from us," said Coun. Denis Carr.
The budget hole led to a drawn-out budget debate this year and council ultimately voted to substantially hike taxes, he said.
Cornwall is now taking the Municipal Property Assessment Corporation (MPAC) to court. It wants damages to cover the refund to Shoppers as well as a further $20,000 because it feels it overpaid MPAC for its assessment services.
Big box, big tax
The refund to Shoppers came after the retailer challenged MPAC's assessment and won an appeal at Ontario's assessment review board.
MPAC valued the property at $55 million in 2012 and Shoppers paid taxes for four years based on that assessment. In 2017, the retailer got the assessment reduced to $44 million.
Walmart Canada Corp. is also appealing its assessments. It argues one distribution centre it leases is worth only half the value on the tax roll and the other two-thirds of its 2012 assessment.
Taken together, the three distribution centres accounted for 10 per cent of Cornwall's tax base, and brought in $24 million to Cornwall's coffers during the years the assessments stood, from 2013 to 2016.
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"Too many municipalities can relate to the situation that Cornwall is in right now," the president of the Association of Municipalities of Ontario and deputy mayor of Innisfil, Ont., Lynn Dollin, told CBC's Ontario Morning.
Big box retailers routinely ask for appeals because they're optimistic it will be worth their effort, said Dollin.
Dollin said MPAC should provide assessments on commercial properties that will "stick."
'Negligent' assessments
Like all municipalities in Ontario, Cornwall pays MPAC to determine the current values of properties, and relies on those assessments to charge and collect tax.
Cornwall argues MPAC assessors were negligent because they included incorrect factors in making their assessments, and fell below the standard of care owed to municipalities.
All three distribution centres saw big jumps to their property values from 2008 to 2012. Cornwall officials say they questioned the hike, too, but claim MPAC assured them the 2012 assessments were reasonable and reflected fair-market value.
MPAC wouldn't comment on its assessments of the three warehouses in Cornwall because they are before the Superior Court of Justice and the Assessment Review Board.
"MPAC takes its responsibility to provide assessments seriously and and we continue to work closely with stakeholders throughout the assessment process," wrote communications director Cathy Ranieri Sweenie in a statement.
Carr said he doesn't see the issue clearing up any time soon.