A nearly two-year-long tax battle between an Orangeville sign maker and the Municipal Property Assessment Corporation (MPAC) appears to be finally over.

MPAC had sought to appeal a December decision by the Assessment Review Board (ARB) that Ken Filsinger, owner of Sign Needs on Centennial Road, should pay a commercial tax rate, rather than the much higher industrial classification put on him by MPAC.

Last Wednesday, Superior Court Justice Emile Kruzick denied MPAC’s application for leave to appeal the ARB decision, agreeing with counsel for Orangeville and Sign Needs that the ARB ruling was correct and factdriven.

Mr. Filsinger’s dilemma became public in February 2009, when he appeared before Orangeville Council to express his concerns about MPAC’s decision to classify his property as industrial, rather than commercial, boosting his tax rate from 2.86 per cent to 4.93 per cent of its assessed value.

Much of MPAC’s argument was based on Regulation 282/98, Part 2, Section 6 under Ontario’s Assessment Act. In it, an industrial property is described as “land used for, or in connection with, manufacturing, producing or processing anything.”

Before council, Mr. Filsinger ridiculed the wording, pointing out that a deli that makes a sandwich would therefore be as much a manufacturing concern as his was.

He estimated that the decision meant he would have to pay over $4,000 more in annual property taxes and, in his opinion, he would need to generate around $100,000 in extra sales to recoup those funds.

What was particularly infuriating for Mr. Filsinger was that Sign Needs was the only sign-making business in Dufferin to have an industrial classification, the others all being classified as commercial.

Last Wednesday’s decision was applauded by Steve Elliott, president of the Greater Dufferin Area Chamber of Commerce. The Filsinger case had been a main motivator in the Ontario Chamber of Commerce unanimously voting to lobby the have the Assessment Act regulation’s wording made less ambiguous.

“It’s just wrong that, with a stroke of a pen, you can change a classification,” said Mr. Elliott in an interview. “I’m saddened that (Mr. Filsinger) had to go through this process. But I’m elated that he has taken on the big guys and won.”

Dufferin-Caledon MPP Sylvia Jones said in an interview Monday that she sees a purpose for such organizations as MPAC, which – like similar corporations such as Hydro One – being listed as a corporation with the Ontario government as its sole shareholder.

“There’s a role for such agencies because they each have their own expertise,” she said. “In this case, though,

MPAC forgot about its role

to represent the shareholders,

the taxpayers of

Ontario. I congratulate Ken

for his persistence.”

The decision has also

The decision has also sparked hope in other

businessmen who, like

Sign Needs, have been

saddled with industrial

classifications while

their competitors

haven’t.

Alexander Leitz,

who operates a dental laboratory in Orangeville, says there are Orangeville, says there are about 360 such labs in the province making dentures, veneers, retainers and other dental products. He figures his is among only six or seven that have an industrial tax classification.

“As far as the Assessment Act is concerned,” he said in an interview, “it’s all a question of interpretation and you can drive yourself insane with it. There’s no consistency with it.”

He says approximately 860 square feet of the property he owns, which is zoned by the town as residential/ commercial, is dedicated to the laboratory but he pays close to $5,000 a year in taxes because of the industrial classification. “Sometimes I ask why I should keep this business when I have to pay so much.”

On hearing of the Sign Needs decision, Mr. Leitz said he was “strongly considering” launching an appeal of his own, but has been daunted by the struggle Mr. Filsinger went through.

“I’m not really sure I could really afford that whole process,” he said.

While last week’s decision eventually means less money in the town and county tax coffers, Orangeville council has strongly supported Mr. Filsinger.

“He’s a very determined man and he worked very hard for this,” said Councillor Mary Rose. “I’m glad he won. We have got to hang on to the business we have in this town.”

Oddly enough, when Mr. Filsinger first took his case to council, he wasn’t seeking a commercial classification. At the time, he suggested council draft a resolution calling on the Province to create a “light industrial” classification, which would include establishments operating in a building no more than 4,500 square feet, employing no more than eight people on a single shift.

Ms. Jones brought the idea up to Ontario finance minister Dwight Duncan, who wrote back: “Where an inconsistency or lack of clarity in the administration of the property class regulation is brought to our attention, our government’s policy has been to review and address the individual issues as they arise, rather than to create new definitions which could lead to new challenges and unintended interpretations.”

Now that such a review has been done and the issue put to rest, Mr. Filsinger indicated in an interview that he would just as soon put the whole episode behind him.

“It’s time to just carry on and do business. We’re commercial, just like the rest of them.”

In his written decision, released last Friday, Justice Kruzick noted that the issue before the ARB “was to determine whether or not the premises in issue were properly classified under the provisions of O.Reg. 282/98 as being industrial or commercial. MPAC submits ARB erred in the classification of this property as commercial.”

He said it was agreed that if the property was not found to be in the industrial class, “by default, it would then fall into the commercial class.”

Citing the relevant portions of the regulation, Justice Kruzick noted that the ARB member had found that the activities at Sign Needs did not constitute “manufacturing”, “producing” or “processing” and therefore did not qualify for inclusion in the industrial property class and therefore, by default, was in the “commercial property class”.

“There is no transcript of the ARB hearing, however, the decision of the ARB is in the motion record.” In it was a notation that the parties had agreed that, based on the Divisional Court’s 2000 decision in 1098748 Ontario Ltd. v. Ontario Property Assessment Corp., the test for leave being granted was twofold: “[T]here must be a question of law of sufficient importance to merit the attention of the Divisional Court and reason to doubt the correctness of the ARB’s decision.

“In this case, Peter Gauthier, a Valuation Review Specialist with MPAC, testified on behalf of the moving party and opined the property was industrial. He presented MPAC’s report and he based his conclusions on two visits to the property and on his discussions with the principal of the Respondent, Mr. Filsinger.”

Noting that the activities of Sign Needs had been summarized in the reasons of the ARB and were not in dispute, he said MPAC’s position “is that the ARB interpretation of the law has rendered different decisions on similar facts, leaving uncertainty for participants involved in the assessment process. MPAC takes the position that the appeal may settle the uncertainty.”

However, in his review of the evidence, the ARB member had not accepted the MPAC opinion and position.

Justice Kruzick said section 45 of the Assessment Act states that in dealing with a complaint or appeal with respect to an assessment, “the Assessment Review board may review the assessment and, for the purpose of the review, has all the powers and functions of the assessor in making an assessment, determination or decision under this Act, and any assessment, determination or decision made on review by the assessment review board shall ... be deemed to be an assessment, determination or decision of the assessor and has the same force and effect.”

Noting that MPAC is responsible for the assessment of every property in Ontario for municipal tax purposes and any complaint or appeal of an assessment is heard by the ARB, the judge said that in effect, the member of the tribunal “stands in the shoes of the assessor for the purpose of applying the provisions of the Act to the matter in appeal. The role of the ARB is to provide a province-wide recourse from the activities of MPAC, subject to judicial review,” adding: “This weighs in favour of a degree of deference.”

As for MPAC’s argument that the ARB had erred and leave should be granted so that the interpretation is clarified, he agreed with Peter Milligan of Toronto’s Miller Thomson LLP, counsel for the town and Sign Needs, that the decision was factdriven and the case was decided on the finding of facts concerning the particular property.

“I agree with the Respondent that this is a matter which requires a case-by-case approach. The result here impacts on this particular property and operation. I, therefore, find that this is not a question of sufficient importance that requires the attention of the Divisional Court.”

As for MPAC’s contention that the issue of the correctness of the ARB decision created uncertainty for other participants in the assessment process and that there was reason to doubt the correctness of the decision, he said: “In my view there is no good reason here to doubt the correctness of the decision. The case before the ARB turned largely on the finding of fact. The ARB member did not accept the evidence of Mr. Gauthier and his position that this property should be classed as industrial.

“The reasons of the ARB are fulsome and well reasoned. I find that they address all the issues raised and were based on the findings of fact, to which the law was properly applied. The reasons set out how the ARB member came to his conclusions and what evidence he relied on. While a different member may have come to a different conclusion, that is not enough to give reason to doubt the correctness of the decision.”