Sault Blog

MPAC (Municipal Property Assessment Corporation) fairness in Ontario centres on accurate, equitable property values as of a specific date (Jan. 1St, 2016), using industry standards for property assessments.

The significant failure and long delay in updating the Ontario Property Tax reassessment since 2016 create potential unfairness as markets shift, making future adjustments significant. This creates vertical residential tax inequity, especially in a city like Sault’s, given its housing’s socioeconomic demographics. A major concern is whether lower-priced homes are assessed at higher proportions of their true value (over-assessed) compared to high-priced homes (under-assessed), leading to a disproportionate tax burden for some. The City of Sault Ste. Marie has a significantly high mill rate, and the failure to update the municipal tax assessments has resulted in an unfair municipal tax burden on city ratepayers.

MPAC uses Artificial Intelligence (AI) and Machine Learning (ML) for property evaluations and internal efficiencies. Property assessments are based on algorithms that establish a property’s Current Value Assessment (CVA), determined by analyzing recent sales of comparable properties (the direct comparison approach) using standardized data and methods. Key factors considered include location, lot size, living area, construction quality, age, renovations, and property features, all benchmarked to January 1, 2016. Property owners are encouraged to use MPAC’s online tool “AboutMyProperty” to review the information used for the particular assessment and file a Request for Reconsideration (RFR) if seen as unfair.

Property assessments based on AI algorithms differ from a residential homeowner’s perceived property value, creating discrepancies in residential housing assessments across individual streets and blocks in our City. This discrepancy creates unfairness in how neighbouring homes are assessed and taxed, resulting in large variations in property tax assessments for comparably even homes on a street. Having large housing tax variations within a street or neighbourhood creates tax unfairness.

MPAC is based on municipal tax categories, including residential, industrial, commercial, institutional, farm, and others.  MPAC taxation fairness derives from each of these tax categories paying into the municipal coffers on an equitable basis and a “fair” amount. The further north, in Ontario, the greater the tax category inequity becomes. The tax canary in the coal mine is the towns of Marathon, Wawa, and Fauquier/Strictland, whose entire municipal tax burden has fallen on residential tax ratepayers. These towns have an incredibly high residential municipal levy because all the other tax categories have vanished.

The warnings from these communities to the City of Sault Ste. Marie, the residential homeowner ratepayer is forced to shoulder a greater share of the municipal tax burden. Municipal taxation has been around forever, but MPAC was officially created in 1997, with policies that reflected that time. Much has changed since, especially in the Sault, where many tax category sectors have collapsed.

Sault’s Industrial Tax category declined significantly with the closure and demolition of the Paper Mill, and the ongoing municipal property tax reductions at Algoma Steel will shift more of the tax burden to the residential tax ratepayer in Sault Ste. Marie, which is unfair. It is incomprehensible that a massive industrial facility would currently be assessed at a paltry $41,163,000 in property taxes, netting the City of Sault Ste. Marie has approximately $5 million dollars. I have no idea how MPAC could value Algoma Steel at such a meagre assessment, given the billions of dollars poured into the Steel Plant for hard asset investments; it hardly seems fair to the residential homeowner ratepayer. After billions of Federal and Provincial government dollars poured into Algoma Steel, and repeated municipal tax breaks and bailouts, the thank you from Algoma Steel is more MPAC arbitration to further shift the industrial municipal tax burden onto the wallets of the lowly residential home-owner ratepayer. Hardly seems fair.

Noticeably absent in the Sault are the warehousing and distribution centres that would provide much-needed municipal taxes. Through the decades, these warehouses and distribution centres disappeared, moved, or were established in either Sudbury or Southern Ontario. Every time a Saultite purchases and has delivered a on-line product, rest assured no municipal taxes will be paid to the Corp. of the City of Sault Ste. Marie. Too many corporations and companies to do business in the Sault without paying any municipal taxes. This, too, hardly seems fair.

The constant downloading of Provincial duties and responsibilities across a variety of social and public services, without adequate funding transfers, has significantly increased municipal costs for providing these services. There are many examples of this; however, the new requirements for land-fill sites demonstrates the massive costs of downloading the new standards required for proper land-fill operations without any Provincial funds transfers for implementing these policies. In the Sault, these costs are estimated at approximately $200 million and are likely to be borne entirely by residential municipal tax ratepayers. Corporations that generate the majority of waste products get a pass on paying for the garbage they create; yet municipal ratepayers pay the landfill costs, which hardly seems fair.

I’m sure there are many other reasons why MPAC’s municipal taxation policies are unfair to the residential homeowner ratepayers of Sault Ste. Marie; however, Sault’s ratepayers cannot be expected to bear a disproportionate share of all municipal costs, as this would be unfair.

Mark Menean, http://www.saultblog.com
Thank you, MPAC website and Property Tax Database.