Re: Boating Club Tax Issues 2009 4 February 2009
Tobin Young, Chairman
Council of Commodores
Your club may have received an updated Property Assessment Notice from the Municipal Property Assessment Corporation (MPAC) directly or via your landlord. The updated notice shows the assessed value of your club’s property based on a January 1, 2008 valuation date and this assessment value will be the basis of your municipal taxes for the next four years (the new value is also phased in over four years). If your club has not received an Assessment Notice, you should contact your municipality to get a copy of the Assessment that covers your area so that you can forecast its impact to your club prior to the 31 March 2009 deadline for objecting to the assessment. Otherwise your municipality will issue you a tax invoice based on this new Assessment that they received, and you will be bound to pay these taxes. Property values have increased by an average of approximately 20% across Ontario since 2005, when the last assessment update was done. However, with the Property tax assessments that just went out, many of our clubs have seen their assessed values rise by 10 – 30 times (not percent). MPAC has decided to increase the Assessed value of waterfront properties a much greater percentage than the provincial average. As an example, in Toronto the assessed value of an acre of open waterfront parkland used by boating clubs has gone from about $200,000 per acre in 2005 to $ 1.2 million per acre in 2008.
Tobin Young, Chairman
Council of Commodores
Your club may have received an updated Property Assessment Notice from the Municipal Property Assessment Corporation (MPAC) directly or via your landlord. The updated notice shows the assessed value of your club’s property based on a January 1, 2008 valuation date and this assessment value will be the basis of your municipal taxes for the next four years (the new value is also phased in over four years). If your club has not received an Assessment Notice, you should contact your municipality to get a copy of the Assessment that covers your area so that you can forecast its impact to your club prior to the 31 March 2009 deadline for objecting to the assessment. Otherwise your municipality will issue you a tax invoice based on this new Assessment that they received, and you will be bound to pay these taxes. Property values have increased by an average of approximately 20% across Ontario since 2005, when the last assessment update was done. However, with the Property tax assessments that just went out, many of our clubs have seen their assessed values rise by 10 – 30 times (not percent). MPAC has decided to increase the Assessed value of waterfront properties a much greater percentage than the provincial average. As an example, in Toronto the assessed value of an acre of open waterfront parkland used by boating clubs has gone from about $200,000 per acre in 2005 to $ 1.2 million per acre in 2008.
In addition to higher assessed values, there is inconsistency in the Ontario laws governing tax classification of various property types. Not-for-profit clubs which own their own land are clearly in the residential tax class but the tax class for not-for-profit clubs which lease their land is not defined. Therefore, clubs which lease land could be, and sometimes are, placed into the commercial tax class. Since this law came into effect, most municipalities have continued to tax boating clubs as residential property but this is slowly changing. Every year, one or two more clubs which lease their land are being classified as commercial property. Commercial tax rates are typically 2 – 4 times higher than residential tax rates. Add a tenfold increase in assessed value with a change to from residential to commercial tax rate and we could see clubs having property tax burdens go from $20,000 to $800,000 per year. Such an increase would put an unbearable strain on all club budgets.
Ontario Sailing is working with their Sport Consultant to communicate these issues to the Minister of Health Promotion. Ontario Sailing has also reached out to all other organized sport bodies in Ontario through the Sport Alliance to get this message out to other sports that may be impacted on this very item: rowing and canoeing clubs and any other sports that lease and rent property. Ontario Sailing’s focus is the impact on the sport and athlete development. This could have a devastating impact on the Pan Am Games (for sailing anyways); training of Sailing Athletes, Olympic and Paralympic teams ( Ontario made up over 50% of the team this past year, and has just had over 60% of the CYA youth national team named from Ontario Athletes). Without our clubs we will have no place to train and less sailing in Ontario.
Additionally, individual clubs are taking action. The Commodores of clubs in the Greater Toronto Area meet regularly to discuss issues common to multiple clubs, with a focus on safe boating at a reasonable cost. This group, the Council of Commodores, has formed a working group for the tax issue comprised of four Commodores and Past Commodores as well as a member of the Ontario Sailing Board of Directors and various professional advisors with experience in the area of property taxes. The Provincial and Municipal governments are being lobbied and MPAC assessments will be appealed. Similar work is being done by clubs in the Whitby, Ottawa , and other areas.
If you’re just becoming aware of this issue, what can your club do?
Do your homework and figure out your 2009 tax bill based on the new assessments and any published tax increases for your municipality. Do not wait until presented with a tax invoice from your municipal government. By that time, it may be too late to request reconsideration or launch an appeal of your valuation.
File a request for reconsideration with MPAC. If you lease your land, you will need to secure authorization to do so from the landowner. Requests for reconsideration must be filed by 31 March 2009. Once you have received your reconsideration notice from MPAC, if you still disagree, a further step is an appeal to the Attorney General’s Assessment Review Board which must be filed within 90 days.
Get your local politicians to understand your situation and help out where they can. Outline your club’s benefits to the community and paint a scenario of what would happen if your taxes increased significantly. Communicate this information to your Ontario MPP(s) and municipal councilors. Busy as political people might seem to be, if they receive a letter from someone they know pressing a legitimate case for political intervention, they will pay attention and give thought to taking up our cause.
Wherever possible, work together with other clubs in your community to collaborate on solutions, share resources, and split the cost of professional advisors.
