Summary of Facts Presented at the MPAC/MNR Meeting

First, Important Background Information…

In Canada, lower levels of government cannot tax higher levels of government.  So — the Municipality of Chatham-Kent is not allowed to tax land owned by Ontario or Canada.  Therefore, Chatham-Kent is not allowed to bill its property tax to property owned or occupied by provincial or federal government agencies (ie- provincial parks, the provincial courthouse, the post office).  Essentially as a show of “good faith”, higher levels of government voluntarily paid a “Payment In Lieu of Taxes” to lower levels of government every year as provided in Ontario’s Municipal Tax Assistance Act (MTAA). The MNR voluntarily paid this Payment In Lieu of Taxes to Chatham-Kent for all its properties in the municipality, including Rondeau.

 

Summary of Facts Presented at the MPAC/MNR Meeting…

Until January 1, 2013, all of Rondeau Provincial Park was assigned a single “Roll Number” for taxation purposes. The MNR used a “Commercial General” mill rate for the entire park, including the cottages.

At Midnight on January 1, 2013 the former single Roll Number for the entire park was subdivided into 284 Roll Numbers:  283 Roll Numbers representing the 283 individual cottage lots (totalling 0.4% of the land apx), plus one Roll Number encompassing the entire rest of the park (99.6% of land apx) including the campgrounds, Brown Store, Visitor Centre, Park Office & Maintenance Yard.

 

AND THEN…

The MNR conveniently declared their Roll Number (everything but the cottages and lots) to be TAX EXEMPT on the basis of being unpatented, untenanted Crown land (despite the fact that they rent out the campgrounds and picnic shelters). In fact, the whole park is unpatented land.

The MNR claims we are all their “tenants” so they are entitled to make us pay property tax on top of our lease payments (now that we have been assigned roll numbers) and they are going to start charging us this tax beginning this year. They arranged for MPAC to independently assess the value of our cottages, consisting of valuations of the land (leased) and the structures (owned).  The Municipality of Chatham-Kent will then determine the taxation rate (often called a Mill Rate) which will be applied to our lots (and cottages, combined).  The MNR will bill us for the new taxes and then forward the new tax collected to Chatham-Kent, while keeping the entire Lease + Service Fees for themselves.

They claim they should have always charged us these additional property taxes but they “forgot”.

The RCA takes the position that we’ve always paid property taxes as an integral component of our annual Lease Fees, and we are not about to pay them twice.  By way of evidence, we offer:

  1. Our Crown Leases, which make no mention of municipal taxes to be paid
  2. Our Memorandum of Understanding with the MNR for our 2017 lease extension signed in 1996, which explicitly details all the fees and allowable increases permitted under the terms of the lease. Property Tax is not included. The same Memorandum of Understanding with the MNR that specifically recognizes the “declining values” of our cottages during the last five years of our Lease Agreement (2013-2017)
  3. Other evidence, including a letter from Managing Director of Ontario Parks Adair Ireland-Smith in 2005, which states very clearly that “cottagers in Rondeau do not pay property taxes, and your annual Service Fee covers what property taxes would normally cover”.  By the way, this statement is in the first paragraph of a long, formal multi-page policy letter to our lawyer;  it was not hastily scribbled & mailed by a low level functionary.

It is the RCA’s position that the MNR’s statement that they “forgot” to charge us taxes does not give them is authority to unilaterally add a new lawyer of taxation to our existing Crown Lease.

 

Who Are the Players?

The Queen in Right of Ontario:  In Canada, Queen Elizabeth II “owns” of all Crown Land.

Ministry of Natural Resources:  The provincial ministry responsible for administering Crown Land.

Ontario Parks:  The branch of the MNR responsible for managing provincial parks in Ontario.

Municipal Property Assessment Corporation: The not-for-profit corporation responsible for fairly assessing the value of all real property in Ontario under the terms of the Assessment Act. They reassess every property in Ontario every four years.

Municipality of Chatham-Kent:  The local government responsible for setting the taxation rate (mill rate) for each property within its jurisdiction.

Rondeau Cottagers Association:  The small group of volunteers who have to figure all this crap out.

 

The Historical Numbers…

In 2011 the province of Ontario paid Chatham-Kent $1,368,000 in lieu of taxes for all its properties within Chatham-Kent.  As the single largest provincially-owned property in the municipality, Rondeau accounted for two-thirds of that grant ($880,000).   According to a long-held formula, the grant for the park is based on two components — the large undeveloped forest & marsh, and the tiny developed portion that contains our cottages. The undeveloped portion represents >99% of the park but only one-third of the grant. The cottages occupy less than 1% of the park, but we pay two-thirds of the grant. Do the math and our two-thirds of Rondeau’s $880,000 works-out to $590,000 — about $2,100 per cottage. We paid the MNR and then they paid Chatham-Kent out of our annual lease fees.

 

Why This Is All So Unfair…

  • 99.6% of Rondeau is paying no property tax to Chatham-Kent, despite their historical “good faith” agreement to do so under the terms of the MTAA
  • 0.4% of Rondeau (us!) is now carrying the tax burden for the entire park
  • The campground, Brown Store, and Visitor Centre are all operating as revenue-producing businesses, but they are not required to budget for (or pay) any property tax  (how does this make their outside-the-park tax-paying competitors feel?)
  • The MNR will continue handing a cheque to Chatham-Kent annually and will no-doubt be thanked for their contribution to the municipal budget — but that money will now come entirely from the cottage community and will probably be a fraction of what they are paying Chatham-Kent now.
  • The MNR will keep our entire Lease Fee + Service Fee for their own use (no doubt to hire more lawyers to fight us)
  • Since we first reminded the MNR of their own signed 1996 Memorandum of Understanding two years ago, the MNR has thus far refused to recognize its call to reduce our Lease Fees as the end of our 2017 lease draws near.
  • Due to MPAC’s four-year reassessment interval, we will continue to be taxed on the 2012 value of our cottage until 2017.
  • So — despite all of the above — the MNR is now expecting us to pay almost double what did before, while the true market value of our cottages plummet.

It is worth noting that at last Saturday’s meeting, MNR Manager John Salo sat by himself in a corner and couldn’t even look us (Dr Dave and Brian) in the eye.  It is clear that even he is sheepish at what the MNR is doing to our community.

 

What We Still Don’t Know…

The big question of course is whether the MNR can get away with this under the law.

  • We are filing a legal challenge on the grounds that the terms of our Crown Lease are being violated, using the MOU and many other supporting documents as evidence
  • We also don’t know what mill rate the Municipality of Chatham-Kent will apply to us
  • Will our mill rate recognize the restricted “seasonal” use of our cottages as per our lease agreement?
  • Will our mill rate recognize that our park superintendent prohibits us from renting our cottages?
  • Will our mill rate recognize that our park superintendent demands to have the “final approval” for the most mundane routine maintenance?
  • Will our mill rate recognize that we have “zero” municipal services inside the park?

The Harwich Township Residential mill rate is currently 0.01483132%.  At a $156,000 assessed value, my (Brian’s) total property tax payable would be $2,313.69.  Add my Lease Fee of $2,406.93 and the Service Fee of $421.06 and the total annual payment becomes $5,141.68.  For those of us on a budget, that’s $428.47/month, every month.  (But again, that mill rate presumes year-round unencumbered use, full ownership, municipal services, and normal use & enjoyment of property — none of which we enjoy due to the MNR’s restrictive policies.)

So the MNR is proposing to use the MPAC assessment process to screw Chatham-Kent out of much of their Payments in lieu of taxes AND download all of their tax liabilities on to our backs. Even we are surprised how immoral and corrupt the MNR has become.

 

The Bottom Line…

On the advice of our attorney Mr David Kirwin, we are proceeding with legal action regarding our liability for these new taxes.  Again, we are challenging the legality & propriety of this whole shady process;  we are not challenging MPAC’s valuations of our individual cottages & lots.  However if you feel that the assessed value of your cottage + lot provided by MPAC was too high, you are encouraged to file for reassessment by the April 1st deadline.  (The MNR is attempting to make both MPAC look like the bad guys here for their valuations, and Chatham-Kent look like the bad guys for their mill rates.  When in fact the MNR is the only true bad guy for illegally forcing this crap upon all of us — and making themselves completely tax-exempt in the process.)

Stay tuned, this one’s far from over.

Dr. David Colby         Brian K. French
RCA President          RCA Vice-President

On Behalf of Your RCA Executive