Tax authority not entitled to assess portions of building in which school operated

Exemptions

Tax authority not entitled to assess portions of building in which school operated

Applicant owned single building complex that housed both church and school. School was operated by corporation incorporated by church for insurance and liability purposes, but was fully controlled by and financially dependent on church. Respondent tax authority conceded that both church and school would likely be tax-exempt if they operated separately, or church would be tax-exempt if it operated school itself, but submitted school had to be considered separate entity in circumstances, and was taxable because it did not own land or have exclusive lease of it. As a result, respondent sought to assess portions of building in which school operated. Application for judicial review. Application granted. School and church were part of single patrimony, and respondent’s position frustrated operation of Assessment Act (Ont.). There was no dispute that church was church or religious organization within meaning of s. 3(1)(3), and school was non-profit philanthropic, religious or educational seminary of learning with meaning of s. 3(1)(5). Idea that exemptions were to be narrowly construed no longer applied. No doubt primary purpose of occupation of land by church was to house place of worship, and “school” sections, such as classrooms and gym, were also integral part of church. That they were used by school in off hours did not detract from their purpose, so all parts except school administrative areas fell under s. 3(1)(3)(i) exemption. Exemption in s. 3(1)(5) applied to all contested school use areas since they shared common patrimony with church. Decision did not deal with church book store and supply shop, but church could re-apply with better evidence, or to daycare housed in separate area of building.
St. George and St. Rueiss Coptic Orthodox Church v. Municipal Property Assessment Corp. (March 9, 2016, Ont. S.C.J., S.F. Dunphy J., CV-11-442880) 264 A.C.W.S. (3d) 302.