Olivia Chow seeks review of Ontario’s property assessments

Incoming Toronto Mayor Olivia Chow wants a review of Ontario’s property assessment system after a Star investigation found some of the city’s most affordable homes are being overtaxed while many mansions are catching a break.

Chow joins a chorus that includes assessment industry insiders, opposition MPPs and homeowners seeking answers from the province and the Municipal Property Assessment Corporation (MPAC), the publicly funded agency responsible for valuating Ontario properties for tax purposes.

MPAC must “make sure that everybody pays their fair share and do it in a just and fair way,” Chow told reporters Monday.

An MPAC spokesperson said the agency’s assessment process has already been extensively reviewed by several third-party evaluators.

“Their reports have been clear that MPAC’s process is both transparent and fair,” the spokesperson said, adding the agency is “eager to work with Toronto mayor-elect Olivia Chow, or any interested municipal leader, to provide information on how properties are assessed and the difference between your MPAC assessment and your property tax bill.”

MPAC officials say they disagree with the Star’s findings, which it says are based on “flawed methodology,” and say the agency’s work is impartial and accurate. An internal MPAC quality control audit the agency provided to the Star says MPAC’s work “raises no concern” of systemic inequity.

Chow said the corporation “needs to upgrade their data” and re-evaluate the formulas it uses to assess a property’s value.

Others, including a former MPAC director, say one way to address the inequity is by the provincial government mandating regular, annual assessment updates. The last province-wide assessment took place in January 2016.

Premier Doug Ford’s office avoided questions Monday on when it will set the next assessment.

In a statement issued by a spokesperson for the minister of finance, the government noted that “MPAC adheres to internally recognized methodologies and standards in valuing properties.”

The Star analyzed sales and assessment data for nearly 12,000 Toronto residential properties that sold in 2016. We found MPAC assessed the most affordable homes at values higher than their sale price more often than it over-assessed the most expensive homes.

Meanwhile, MPAC more often assessed the most expensive homes at values lower than their sale prices.

Some of those getting tax breaks are those who need it least: a retired tennis pro, a Toronto sports team executive and a former Blue Jays infielder all own or owned homes that were assessed at significantly less than what they paid for them in 2016.

MPAC told the Star the newspaper’s reporting is “inflammatory and misleading to property owners when it comes to the quality and accuracy of their assessment.”

Katrina Miller, executive director of Canadians for Tax Fairness, a non-profit organization that advocates for fair and progressive taxes, said citizens expect their tax system to be fair and transparent.

“Unfortunately property taxes levied through MPAC are neither,” Miller said. “Disproportionately over-assessing the value of lower-cost homes places an unfair tax burden on lower-income individuals who own or rent those homes.

Mayor-elect Chow, whose campaign promises included a higher land transfer tax on homes that sell for $3 million or more, did not specify who should conduct a review of MPAC.

Ontario NDP Leader Marit Stiles called Monday for an independent, third-party review of the assessment agency and its methodologies.

“Unless we call for a third-party investigation and get this moving…the only people who benefit in this situation are the very wealthy. And frankly, they’ve defended this system far too long and protected it,” said Stiles, adding that by electing Chow as Toronto’s new mayor, the citizenry is sending the signal that “we’re not happy with the status quo.”

“This is a real opportunity. What we need is for the premier to get on board and agree to a third-party independent investigation,” she said.

Chris Rickett, a former director at MPAC who left his post last year, said the Ontario government is “allowing these inequities to fester” by delaying the latest reassessment and deepening the divide between income classes.

The last time MPAC conducted a provincewide assessment update was in 2016. Ontario was due for another in 2020 but the province postponed it due to the COVID-19 pandemic.

“The (Star) story highlights the need for an annual property assessment update,” said Rickett, a former director of municipal and stakeholder relations at MPAC, who left the agency last year to join the City of Markham. “The longer you wait between assessment updates, the more inequity gets built in.”

Glenn Lucas is a member of MPAC’s advisory committee on industrial properties. He’s also the founder of Property Tax Review Services, a company that has been challenging MPAC valuations for three decades representing clients across Ontario. Lucas says he doesn’t believe assessing properties more often will fix inequities.

“They don’t accept that their system has errors,” he says. “That’s the problem.”

Lucas says MPAC should get out of the business of selling the assessment data it collects to private entities such as banks and insurance companies, and focus solely on serving Ontario taxpayers.

MPAC says it uses revenue generated from selling its data and valuation models to offset the fees it charges to municipalities for assessments. Ontario municipalities collectively pay MPAC about $200 million annually for this service.

Forcing MPAC to focus exclusively on assessing properties and not selling that data, or products they create using the data, will allow the agency to be more transparent to the public, Lucas said.

“That would solve 99.9 per cent of our problems.”

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