MPAC leaves an impact on Council

According to its website, MPAC, the Municipal Property Assessment Corporation is an independent, not-for-profit corporation funded by all Ontario municipalities, accountable to the Province, municipalities and property taxpayers through its 13-member Board of Directors.

Love them or loathe them, their very existence has caused a lot of controversy in smaller communities. Property values are usually based on the concept of willing seller, willing buyer. The home owner tries to get the best price for the sale of his home while the potential buyer would prefer the lowest price.

Municipalities derive a large portion of their income from taxes based on property assessments, and as a result, obtain the services of MPAC through a service agreement wherein a percentage of the total property assessments are paid back to MPAC. The obvious question arises about whose interest the corporation is looking out for. Property taxes can be set according to these numbers based on the requirements of the budget for each municipality. In this way the service offered is very valuable to municipalities, but there is another side. When properties are assessed, a comparison model is used to determine value along with past sales and other factors.

When MPAC was first contracted by the township of Schreiber, a number of residents saw property tax increases of up to 30 percent, especially in the Walkers Lake area. There is a perception that waterfront property is more desirable and is taxed at a higher level, even if the  services provided are fewer. The usual model compares cottages in southern Ontario and applies a similar evaluation process to rural waterfront settings in northern Ontario. Much like comparing apples to potatoes, this broad based approach doesn’t sit to well with homeowners along the north shore of Lake Superior.

Another falsehood precipitated by the real estate industry is the notion that property increases in value over time. This is not always the case, and in Schreiber in particular, some homes have declined in value and even sold below market value. Every four years, MPAC performs re-assessment and updates to all the properties in its portfolio. That will happen this year, and as a result, MPAC usually meets up with its clients, the municipalities, to update everyone on what to expect going forward.

A presentation by Chad Tanner, an account manager with MPAC, took place during the March 10th council meeting in the council chambers of the Schreiber municipal building. Questions were taken at the end of the presentation and it was clear that there was still a lot of confusion around how the assessment process accurately reflected the situation in Schreiber, especially in regards to failed sales of listed properties.

Councillor Mullins reasoned that if assessment was based on sales from listed properties, then failed sales should should have a negative impact on that same data. Also the fact that in Schreiber the price of housing has plummeted in recent years, might mean a potential loss of revenue depending on how the findings affect the delivery of a balanced budget for the next term.