MPAC: Ontario’s very own boondoggle

Those of us who maintain that government has gotten far too big for our own good can take little solace in the Ontario government’s creation of the Municipal Property Assessment Corporation (MPAC). MPAC is a not for profit corporation charged with maintaining up to date assessments of all of Ontario’s properties, so that municipalities could levy taxes based on real value. The Harris Government initially created the corporation in 1997 then named the Ontario Property Assessment Corporation, because of the wide disparity in property assessments, particularly those in older urban areas versus newer suburban neighbourhoods. It used to be that homes in places like Toronto’s fashionable Cabbagetown area were assessed at say $12,000 to $16,000, while newer homes of similar size in places like Richmond Hill were assessed at $180,000 to $200,000. Both assessments reflected their value when the houses were first purchased.

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So the purpose of this new body was to level the playing field and render assessments that were in tune with what the actual market value of a home might be in efforts to have people living in homes of similar value paying municipal taxes based on those similar values. Of course we now know that this hasn’t happened, as the residents of large urban areas like Toronto, pay much less in property taxes than do residents of most of the outlying “bedroom” communities. And in the process we have this monster called MPAC, which justifies its existence by claiming that it “administers a uniform, province-wide property assessment system based on current value assessment in accordance with the provisions of the Assessment Act. It provides municipalities with a range of services, including the preparation of annual assessment rolls used by municipalities to calculate property taxes. Municipal enumerations are also conducted by MPAC in order to prepare a Preliminary List of Electors for each municipality and school board during an election year. Today, MPAC is responsible for the assessment of more than 4.6 million properties in the province.” MPAC has 35 offices across the province of Ontario with operating expenses of $163 million. In 2007, MPAC employees visited 570,000 properties and attended over 1,600 meetings. It re-inspected over 22,000 properties in non municipal areas of Northern Ontario and added $18.8 billion in new assessment values, placing total property values in Ontario at nearly $1.4 trillion. The company’s annual report boasts that 98.8% of its assessments were accepted by property owners without protest, while those who did protest and won a reduction in their assessment amounted to about one half of one percent of all properties assessed. In 2008, the company will assess or re-assess some 4.7 million properties across Ontario, in efforts to provide municipalities with up to date market values for the purpose of taxation. So what makes MPAC a boondoggle, you might wonder, given that according to their annual report they are fulfilling their mandate? For openers the company’s accuracy rate leaves a lot to be desired. In one municipality in eastern Ontario MPAC sent out value assessments to a large group of homeowners that supposedly reflected property values as of January 1, 2007 only to have to advise those homeowners that their homes had been incorrectly assessed and were subject to a reassessment which would be some 30% higher than the original. One wonders how a corporation that prides itself in a “commitment to quality” could make mistakes of such magnitude. Often the assessments have no basis in reality, as assessments rendered on many homes are wildly above or below the actual market value of the assessed property. In addition, the current assessment process is punitive in that those homeowners who take good care of their homes end up paying more in property taxes, while those who allow their properties to degenerate pay less. MPAC is a scam, a “lightning rod”, if you will, between taxpayers and politicians. In many communities around Ontario property taxpayers’ concerns are addressed at public meetings attended by municipal and provincial politicians as well as representatives of MPAC, whose main job it is to deflect taxpayers’ wrath away from the politicians. So despite record assessments, most municipalities in Ontario cry poor, claiming they do not have enough money to fully meet their commitments. This despite the fact that municipal taxes in most jurisdictions have been on an upward trajectory that bears no relationship to the rate of inflation. In some instances taxpayers are finding their municipal taxes double, triple and then double again in less than a decade. Yes, there have been reductions in value of properties, but these are far fewer than those that have increased. Municipal politicians like to place the blame on whoever happens to be running Queen’s Park, while the provincial government du jour claims to be blameless because they are not responsible for property assessments. Really, it’s a neat way to scam taxpayers out of more money without having to accept any of the blame. In its annual report MPAC refers to “stakeholders” and “customers”, the former being municipal and provincial governments, while the latter are the taxpayers. The word “customer” is a gross misnomer as a customer purchases something from a vendor for a mutually agreed upon price. MPAC’s “customers” do not “purchase” the services the company provides in the sense that money changes hands directly for services rendered. MPAC’s “customers” have their service rammed down their throats to the benefits of MPAC’s “stakeholders”. It’s all to take the heat off local and provincial politicians. What’s needed in Ontario is a property taxation scheme that does not penalize property owners for taking good care of their homes and that does not constantly have property owners anxious about tax burdens due to MPAC’s assessments.