An Orangeville sign shop owner's battle with the Municipal Property Assessment Corporation (MPAC) was the subject of an Assessment Review Board hearing last week and both sides are now waiting for the board's decision on the matter.

The hearing, held at town hall, pitted MPAC against Ken Filsinger, owner of Sign Needs on Centennial Road, who has seen his property taxes almost double after his business was upgraded to an industrial classification from a commercial one.

The hearing was chaired by Ian Birnie, who heard the arguments from Mr. Filsinger's lawyer, Chris Scott, and MPAC lawyer Shawn Douglas. He has 90 days to deliver his decision.

Mr. Filsinger told the hearing that his tax classification changed from commercial to industrial after Sign Needs moved to its present location from Third Street. But the nature of his business didn't change, and tax rolls reveal that all other sign-making companies serving Orangeville have a 'commercial' classification.

He says his taxes have increased from around $6,000 to between $10,000 and $11,000 as a result of the change.

At the hearing, MPAC evaluation review specialist Peter Gauthier explained that the processes involved in Mr. Filsinger's business put it into the industrial classification under Section 6 of the Ontario Assessment Act.

Mr. Gauthier said he did a full inspection of Sign Needs after, he said, Mr. Filsinger filed an "application for review of classification" with MPAC. He said he also discussed the nature of the business with Mr. Filsinger.

"After I was fully informed, I concluded the property class was appropriate," Mr. Gauthier told the hearing.

As for its definition of industrial land, Regulation 282/98, Part 2, Section 6 of the act reads: Land used for, or in connection with, manufacturing, producing or processing anything.

The Assessment Act terms a commercial property as one where the activities are limited to taking a product and reselling it as is; such as a retail store.

During cross-examination, Mr. Scott asked Mr. Gauthier if he thought the wording within the act was "overbroad."

"I'd agree the wording is somewhat broad," said Mr. Gauthier.

"Would you say it is overbroad?" asked Mr. Scott.

"In my personal opinion, I would say so."

"And in your expert opinion?"

"I would also say so."

MPAC lawyer Ms. Douglas argued in her oral summation that it was not Mr. Gauthier's responsibility to personally discern whether a business is industrial or commercial. "A witness should not be asked to explain processing and manufacturing," she told chairman Birnie. "He only needs to know what falls within the rules."

In earlier testimony, however, Mr. Gauthier told Ms. Douglas that he decided Sign Needs was a manufacturer because of a stepby step production process. He explained, in detail, that Sign Needs' method of vehicle lettering was a 17-step manufacturing process.

"Not only is it a process that falls under regulation," he continued, "it, in our view, is also the process of manufacturing an image."

In a later interview, Mr. Filsinger said he never discussed his business with Mr. Gauthier, nor did Mr. Gauthier see the operation in action. The only time he explained production to MPAC, he said, was at a discovery hearing in February, where he explained it to Ms. Douglas.

When asked by Mr. Scott why other sign shops are not classified industrial, Mr. Gauthier said: "Just because it's a sign shop doesn't necessarily mean there's manufacturing going on." Minutes later, though, he said "if you make signs, you should be industrial (classification)."

In his five-minute oral summation, Mr. Scott told chairman Birnie that "a person cannot be asked to obey a law that is just too broad that, no matter what, you are going to be caught by it."

Ms. Douglas' summation, on the other hand, lasted well over an hour; during which she cited a number of precedents where businesses argued for a change in tax classification and were denied.

(Mr. Gauthier had earlier stated that, during his seven years on the job, he had never reversed a decision to classify a business as industrial).

Mr. Filsinger has allies in his fight at a number of levels. In a letter to Ms. Douglas' law firm, Orangeville tax collector Debbie Goss related, in regards to Sign Needs: "The municipality at this time wishes to advise that we do not support the classification of Industrial Taxable as returned by MPAC."

The Ontario Chamber of Commerce has endorsed a submission from the Greater Dufferin Chamber of Commerce that the Section 6 regulation in the Assessment Act be changed.

"The opening words of this provision (land used for, or in connection with manufacturing, producing or processing anything) have resulted in changes to the tax treatment of numerous properties," the submission reads. "Businesses such as denturists, artisans, print shops and software developers now find themselves treated as industrial because they are producing or processing something."

Dufferin-Caledon MPP Sylvia Jones supports the chamber and Canadian Federation of Independent Business in recommending that the industrial class definition be narrowed.

In a letter to Ontario finance minister Dwight Duncan, Ms. Jones wrote: "I would urge you consider making this change to your regulation. In these challenging economic times, I believe we need to do all we can to support businesses in our province."