Canada: Deference For Assessment Review Boards

Supreme Court Of Canada Upholds Reasonableness As Standard Of Review

The standard of review of a composite assessment review board's decision to increase a property tax assessment is reasonableness, the Supreme Court of Canada recently held in Edmonton (City) v Edmonton East (Capilano) Shopping Centres Ltd, 2016 SCC 47 [Capilano]. The Court stated that the standard of review from a decision of an administrative tribunal related to that tribunal's enabling statute is presumed to be reasonableness. The presumption had not been rebutted in this case, even though the appeal arose from a statutory right of appeal with a leave requirement. Applying this standard, the Court also determined that the Board's decision to increase the property assessment was reasonable.

The issue in Capilano arose where Edmonton East (Capilano) Shopping Centres Ltd. (the "Company") filed a complaint which was heard by a composite assessment review board (the "Board") concerning the 2011 property assessment of its shopping centre. The shopping centre was initially assessed at $31 million, and the Company sought a reduction to $22 million. During the hearing of the complaint, the City of Edmonton noted an error in its assessment and requested that the Board increase the assessment to $45 million. The Board ultimately increased the assessment to $41 million. The Company appealed the Board's decision on the basis that the standard of review on a question of the Board's interpretation of the Municipal Government Act, RSA 2000, c M-26 [MGA] ought to be correctness, and that the Board did not have jurisdiction to increase a property assessment after an owner submits a complaint.

Standard of Review

The Court rejected the Company's arguments that the correctness standard should apply on this issue.

The Court began by upholding the framework to determine the standard of review set out in Dunsmuir v New Brunswick, 2008 SCC 9 [Dunsmuir]. The Dunsmuir framework is rooted in the principle of deference; courts should respect the choice of legislature to grant administrative tribunals responsibility over certain issues.

According to the Dunsmuir framework, an issue involving the interpretation by an administrative body of its enabling statute is presumed to be reviewable on a reasonableness standard. Exceptions to this presumption include where jurisprudence has already settled the applicable standard of review, and four distinct categories of appeal which call for a standard of correctness. The presumption may be reversed if contextual factors indicate a legislative intent to set out a standard of correctness.

One of the correctness categories is "true questions of jurisdiction or vires" (Capilano at para 24). The Court determined, however, that the question of the Board's jurisdiction to increase an assessment was not a true question of jurisdiction ; rather, it was a question of interpretation of the powers of the Board set out in the MGA. The Court noted that:

It is clear here that the Board may hear a complaint about a municipal assessment. The issue is simply one of interpreting the Board's home statute in the course of carrying on its mandate of hearing and deciding assessment complaints.

The Court also rejected the argument that issues which arise on a statutory right of appeal with a leave requirement constitute a new category of issues reviewable on a correctness standard. In several recent decisions, the Supreme Court had reviewed issues arising from a statutory right of appeal on a reasonableness standard.

Finally, the Court rejected the Company's argument that contextual factors supported a legislative intent to set a standard of correctness. The Court found that the contextual analysis was unnecessary due to the existence of a strong line of jurisprudence supporting a reasonableness standard. The Court cautioned against engaging in contextual analysis to determine the standard of review, since to do so can generate uncertainty and extensive litigation on that subject.

Therefore, where a court reviews an issue arising out of the Board's change (including an increase) to an assessment, as in Capilano, the standard of review is reasonableness.

Board's Jurisdiction to Increase

Based on the standard of review, the Court determined that it was reasonable for the Board to increase the property assessment.

First, the Court rejected the Company's argument that the Board's decision to increase the assessment was unreasonable because the Board did not give reasons. The Court's decision was based on the Company's failure to dispute the increase during the Board proceedings, making the lack of reasons unsurprising. The Court instead assessed the reasonableness of the decision based on reasons the Board could have given.

The Court found that the Board was empowered to increase an assessment based on the ordinary meaning of section 467(1) of the MGA:

467(1) An assessment review board may ... make a change to an assessment roll or tax roll or decide that no change is required.

The Court found that "change" was broad enough to include an increase.

The Court also rejected the Company's argument that, since section 460(3) of the MGA does not allow a municipality to make a complaint to the Board, the legislature intended for municipalities not to have the power to increase an assessment. The Court found this was not supported by the scheme of the MGA, based in particular on a municipality's ability to correct errors as set out in sections 305(1) and (5). Given the statutory scheme as a whole, the Court determined that it was reasonable for the Board to increase a property assessment during a complaint proceeding.

The dissenting judges in this 5-4 split disagreed with the majority on both point, in a lengthy and well-reasoned decision. On standard of review, they held that, taken together, the statutory scheme and the Board's lack of relative expertise in interpreting the law led to the conclusion that the legislature intended that Board decisions on questions of law or jurisdiction appealed to the Court of Queen's Bench be reviewed on the correctness standard. They held that even if there was a presumption of deference in the circumstances, the presumption was rebutted by clear signals of legislative intent. On the merits, on a correctness standard of review, the dissent would have reversed the increase to the property assessment because it was beyond the scope of the complaint the Board was adjudicating.

The decision to set the standard of review as reasonableness in this case is the latest in a long line of cases dealing with the application of principles of deference to interpretation by an administrative tribunal of its home statute. The Court's decision demonstrates respect for the legislature's decision to delegate certain adjudicative tasks to administrative boards, and the notion that a presumption of deference will serve to foster access to justice, lower costs and increase efficiency.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Alexis E. Teasdale
Russell Kruger
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