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COVID-19 and Property Tax Appeals: Not ‘Exceptional’ Enough

A recent case confirms that property owners challenging their property tax assessment must generally complete their assessment appeal rather than seeking judicial review of an interim decision of the Assessment Review Board, and may not be able to rely on economic effects of COVID for later taxation years, even though the new regulations extending the four-year assessment cycle came about because of COVID.

In National Car Rental Inc. et al. v. Municipal Property Assessment Corp. et al., 2023 ONSC 2989, the Divisional Court quashed National Car Rental’s request for a judicial review of the Assessment Review Board (“ARB”) denial of its motion to amend its Statement of Issues to plead the effects of the pandemic. Key to the Divisional Court’s decision were 1) prematurity, 2) alternate appeal rights, and 3) preventing a party from circumventing the applicable legislative scheme.


  • Finish the Hearing: While a party may strenuously disagree with an interim/interlocutory decision made by an administrative tribunal, odds are it will have to complete the hearing and then seek an appeal to the court and attack that error in the context of the entire hearing;
  • COVID doesn’t necessarily change valuation after valuation date: So far, the ARB has found that the economic effects of COVID are not relevant to subsequent taxation years in the assessment cycle. Equally, so far, the Courts have not ruled on the ARB’s interpretation of the law and this case puts that important exercise even further out and without the benefit of evidence to be led at the ARB for the Court’s ultimate consideration.
  • Inefficiency: The court’s strict approach to prematurity may lead to inefficient use of already-strapped judicial resources and cost taxpayers more. Given the significance of COVID to property values, it is very likely that a taxpayer (be it National Car Rental or otherwise) will appeal to Courts at the end of an ARB process. To the extent that the Court then agrees with the taxpayer that the economic effects of COVID after the valuation date are relevant for assessment of subsequent taxation years, then the ARB hearing will have to be redone. By preventing the issue (and therefore the evidence) from being advanced, the ARB has guaranteed that if the taxpayer’s interpretation of the Assessment Act is ultimately accepted by the Court, a complete “re-do” will be needed at the ARB.
  • Exhaust Your Statement of Issues: The ARB, and now the Court, has taken a strict view on proposed amendments to Statements of Issues. Before filing, ensure you have exhausted all potential issues. No doubt National Car Rental sensibly believed that COVID would be considered an exception allowing an amendment (it was an ‘exceptional’ event for us all), but this case should convey to participants that deadlines will be strictly enforced. Unfortunately for taxpayers, a broad general pleading designed to capture any future issue is unlikely to provide the necessary window for the truly unexpected.


National Car Rental operated out of Pearson International Airport (federal lands) but is subject to pay municipal tax as though it were a property owner.

The Assessment Act requires Ontario property to be assessed on current value. The current valuation date for the four taxation years from 2017 to 2020 is January 1, 2016. Given COVID, the taxation period of 2017 to 2020 was extended to 2017 to 2023, such that the current valuation date for the assessment year of 2021 remains January 1, 2016. MPAC assessed the property. National Car Rental appealed MPAC’s assessment to the ARB.

In advance of the hearing for the 2017-2020 years (being the only years at issue), National Car Rental complied with the Schedule of Events by delivering its Statements of Issues on time in 2019 and its Reply by February 2020 (i.e. before COVID). The only opportunity to raise an issue at the hearing which was not set out in the Statement of Issues is if there were “exceptional circumstances”. Subsequently, once the 2021 taxation year was under appeal, National Car Rental took the position that for the 2021 taxation year, the COVID-19 pandemic measures constituted “exceptional circumstances” which warranted an extension of the due dates under the Schedule of Events. It should not be “stuck” with the Statement of Issues prepared when only the 2017-2020 years were on appeal (it also brought an unsuccessful motion for the 2021 appeal to be heard separately, focused on COVID). It argued that evidence of reduced property values during the period of pandemic restrictions constitute a change to the property’s “state and condition” and must therefore be put in issue before the ARB in order that their appeal be fairly conducted. To this end, the Applicant brought a motion to alter the Schedule of Events to allow them to amend their Statements of Issues to raise new issues and file new evidence regarding the pandemic period.

The ARB dismissed the motion in an interim decision, holding that the proposed new issue – a decrease in income during the COVID-19 pandemic – was not relevant to the question to be determined in the proceeding, which is what the current value of the property was as of the statutory valuation day of January 1, 2016. National Car Rental applied for judicial review.

Divisional Court

The Divisional Court quashed the application for judicial review:

  • Prematurity: The Application is premature, based on the well-established case law that reviewing courts will decline to engage in a judicial review until the administrative proceeding has been completed, absent “exceptional circumstances.” In so finding, the Court held that the ARB’s interim decision was interlocutory in denying a request to add an issue to the appeal. The ARB did not make a final decision/determination on whether “the Assessment Act should be read as requiring evidence of events subsequent to January 1, 2016 as necessary to the ARB’s determination of the Applicant’s appeal of the MPAC valuation assessment for the 2021 taxation year.”

    Such logic is difficult to accept when Rule 49 of the ARB’s Rules prohibits a party from raising an issue at a hearing not set out in the Statement of Issues. Without the COVID issue in the Statement of Issues, the taxpayer will be prevented from leading evidence on that topic such that the determination will never take place or will inevitably fail. While the ARB did not officially make the final “merits based decision”, in essence that topic is now foreclosed. Further, as set out above, it means that there may be a complete “re-do” of the ARB hearing if the taxpayer succeeds on the merits before the Courts that the ARB ought to have considered COVID for the 2021 taxation year.

  • Alternate Remedy: In concert with the doctrine of prematurity, the Court held that National Car Rental still has its right to seek leave to appeal the ARB’s final order. If leave is granted, the test will be correctness to evaluate legal basis for whether events subsequent to January 1, 2016 to be factored into an analysis of the January 1, 2016 valuation date.
  • COVID: While COVID-19 was a globally exceptional circumstances, it does not constitute “exceptional circumstances” necessary for a court to judicial review an interlocutory order. Exceptional circumstances permitting judicial review of an interlocutory decision is a narrow legal test that carries a high threshold. The issue before the ARB was not whether pandemic restrictions constituted global exceptional circumstances – it obviously was – but whether section 19.2(1) of the Assessment Act should be read as requiring evidence of events subsequent to January 1, 2016 as necessary to the ARB’s determination of the Applicant’s appeal of the MPAC valuation assessment for the 2021 taxation year.

It is difficult to understand why COVID is not an exceptional circumstance before the ARB when the taxpayer could not have predicted it in advance of pleadings deadline in 2019/early 2020, and when the ARB refused to allow the 2021 appeal to proceed on its own (and therefore with its own Statement of Issues deadline). Also, it seems unfair that while the regulations extended the 2017-2020 assessment cycle into 2021-2023, the taxpayers’ appeal of the extended period does not give rise to a new opportunity to identify issues when the issue deadline came about before the assessment cycle was extended (and before COVID).



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