Evolution of Ontario's property tax assessment organization

Ontario Property Assessment Corporation:

Individual municipalities in Ontario, Canada were responsible for the provision of assessment services before 1970. However, the introduction of the Ontario Property Assessment Corporation Act resulted in significant changes in tax assessment in the province. The legislation paved way for the establishment of the Ontario Property Assessment Corporation, which has continued to evolve since its inception. One of the main reasons for the creation and introduction of this organization was to enable the province to take over tax assessment, which was traditionally the responsibility of individual municipalities. The province would take over tax assessment in attempts to return the function to the local government after the development of a consistent and province-wide framework of assessment. Moreover, the organization was created following calls for greater control over the management of major elements of local property tax system by individual municipalities.

History of Ontario Property Assessment Corporation:

As a federal country, Canada has three levels of government i.e. federal, provincial, and municipal governments. However, municipalities are only recognized in the country's Constitution on the basis that they are the responsibility of their respective provinces. Due to the nature and levels of government in Canada, policies on property tax can vary across provinces. Generally, property taxes among provinces are levied on commercial, residential, and industrial properties. In the province of Ontario, property tax is regarded as a local tax except in the province's education sector. Ontario has experienced the need for tax assessment reform from time to time due to major issues or factors.

In 1967, Ontario Committee on Taxation discovered inequities in the province's tax assessment system (Slack, p.5). Some of the major inequities that contributed to the need for assessment reform occurred within classes of property, across municipalities, and between classes of property. This contributed to some major reform initiatives such as reassessment at local option and provincial takeover of assessment. The need for provincial takeover of assessment was the basis for the creation of the Ontario Property Assessment Corporation and the development of a consistent assessment framework for the province. The reforms resulted in the takeover of tax assessment by the province and the eventual relieving of municipalities from the cost of the function. These measures were geared towards achieving equity between municipalities and between property owners in every individual municipality.

As previously mentioned, the Ontario Property Assessment Corporation was established following the enactment of the Ontario Property Assessment Corporation Act. The corporation was formed in order to return the function of tax assessment to local government based on a province-wide and consistent assessment framework ("Ontario Budget Update," par, 1). The introduction of this organization was also accompanied by the establishment of the Ontario Fair Assessment System, which was part of tax reforms in Ontario. Notably, the Act was introduced after consultations between the local government and representatives of individual municipalities in the province. The other stakeholders involved in the process include municipal staff associations and the Association of Municipalities of Ontario. The consultation led to the establishment of a forum to advice the government and shared its views on tax assessment.

According to the Ontario Property Assessment Corporation Act, Ontario Property Assessment Corporation consists of a 14-member Board of Directors. The board is made up of 12 municipal members, 6 municipal officers or employees, and 6 elected officials. In addition, the other 2 members of the board will be appointed by the Minister of Finance to represent the other stakeholders in tax assessment.

Evolution of Ontario Property Assessment Corporation:

Since its inception, Ontario Property Assessment Corporation has undergone tremendous reforms and evolution. In its initial years of operation, the corporation was responsible for current value assessment through which it determines how much tax a property owner must pay. The organization determined property tax by multiplying the assessed market value of a property by the applicable tax rate. The tax rate is the total of two numbers i.e. The rate set by municipality to achieve its own budgetary needs and the education tax rates established by the province to finance school boards.

One of the major changes or evolution of this corporation occurred in 1998 when it was given the responsibility to establish the assessed value for properties in the province, a function that was played by the Ministry of Finance. The transfer of this responsibility was followed by the renaming of the organization to Municipal Property Assessment Corporation (MPAC). The new corporation is a not-for-profit and self-governing organization in the province of Ontario ("Property Assessment," par, 3).

The transformation of this corporation was based on the provisions of the 1997 Ontario Property Assessment Corporation Act and the Assessment Act. Following the evolution, the corporation's primary responsibility is to prepare a yearly assessment roll for every municipality, locality, and non-municipal territories. The annual assessment rolls must contain several things such as the names of all property owners liable to assessment in every jurisdiction, an adequate description of every property to identify it, and the present value of land and buildings that are liable to taxation.

The Municipal Property Assessment Corporation precisely values and categorizes all properties in the province for municipal tax purposes. In order to determine taxes for the province, the corporation classifies property in various categories i.e. commercial, residential, industrial, multi-residential, farm, and managed properties. Furthermore, the Municipal Property Assessment Corporation carries out a province-wide assessment like the one it carried out in 2012 based on a market value. Based on the Assessment Act, present value in relation to land is commonly known as the market value of a property.

The evolution of the corporation has brought changes in its structure since it's currently governed by a board of directors consisting of 15 members. The board includes 8 municipal representatives, 5 property-taxpayer representatives, and 2 representatives of the province. Each of these representatives in the 15-member board of directors is chosen by the Minister of Finance who considers proposals by the Association of Municipalities of Ontario ("Municipal Property Assessment Corporation," p.193). Currently, the Municipal Property Assessment Corporation has nearly 1,600 workers in its head office. The corporation has enough systems and processes to ensure its assessment rolls are up-to-date, complete, and precise and that all costs incurred are based on consideration for economy and efficiency.