The Scope of a Municipality’s Power to Create Assessment Sub-Classes
By Michael E. Swanberg
Reynolds Mirth Richards Farmer LLP
AMSC Casual Legal Service Provider
Section 297 of the Municipal Government Act requires municipal assessors to assign one or more of four prescribed assessment classes to each assessed property, including “residential”, “non-residential”, “farm land”, and “machinery and equipment”. Each class is given a particular definition under subsection 4. Under section 354 of the MGA, municipalities must set a tax rate for each assessment class or sub-class each year.
Municipalities have the power to create “sub-classes” under the “residential” and “non-residential” classes prescribed in section 297. For sub-classes under the “residential” class, the municipal power to create sub-classes is broad – council may create sub-classes on any basis it considers appropriate. However, for sub-classes under the “non-residential” class, municipalities can only create sub-classes as prescribed in the regulations.
Under the Matters Relating to Assessment Sub-Classes Regulation, municipalities are given the power to create three sub-classes under the “non-residential” assessment class: “vacant non-residential property”, “small business property”, and “other non-residential property”. No other sub-classes are permitted under the non-residential class. For the “small business property” sub-class, the regulations prescribe a definition for what constitutes a “small business property”: it must be operating under a business license or otherwise identified in a municipal bylaw, and it must employ fewer than 50 full-time employees across Canada, or a lesser number of employees as set out in a municipal bylaw as at December 31 or some alternate date established by municipal bylaw.
Importantly, a municipality cannot create a sub-class that has the effect of moving property from one of the classes identified in section 297 to another. For example, a municipality cannot create a residential sub-class that includes property that meets the definition of “non-residential” property under section 297(4). When drafting sub-classes under the “residential” class, municipalities should be careful to ensure that the property described in those sub-classes otherwise meet the definition of “residential” property under section 297(4)(c), and do not fall under any of the other classes prescribed in section 297. Otherwise, the sub-class could be vulnerable to a Court challenge on the basis that it goes beyond the municipality’s statutory jurisdiction.
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DISCLAIMER: This article is meant to provide information only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated.