ONTARIO JUDGE RULES GOVERNMENT ILLEGALLY INCLUDED TRAILERS IN CAMPGROUND ASSESSMENTS - MUST RETURN NEARLY $50 MILLION IN TAXES

By Harold Merton
UPDATED July 24, 2007

See updated Article

A milestone court case in Ontario has resulted in a decision that will be
celebrated by a great many people in the campground and RV manufacturing and sales industry in the province.

A judge in The Superior Court of Justice has ruled that the Municipal
Property Assessment Corp. (MPAC) - the people who decide on the assessment of your real estate property in Ontario - acted unlawfully by assessing seasonal trailers as part of the land value in a case involving Carson's Camp Ltd. of Sauble Beach, Ontario.

MPAC sent waves of astonishment through the campground industry in 2003 when they decided to include the value of seasonal trailers & semi-permanent trailers that were occupying sites at Ontario campgrounds. Basically, any RV that wasn't immediately towable was deemed to be part of the value of the campground property and was included in the assessment against the protests of campground owners and industry leaders.

The result was huge increases in the assessed value of the campgrounds which then led to huge increases in taxes levied by the respective municipalities that use the MPAC figures to calculate local taxes.

In the Carson case, taxes jumped by more than 400 percent from $24,868 in 2002 to $103,994 in 2003.

The judge's decision has been hailed by winning lawyer Peter Fallis of
Durham, Ontario as "bullet-proof" from appeal and is expected to apply to more than 1,000 private campgrounds around Ontario who saw their assessments skyrocket in 2003.

The court ordered repayment of the illegally collect taxes, plus interest,
which is expected to total about $50 million, said Murray Lembke of Ayton, Ontario chairperson of the RV Action Group, an organization founded to fight the increases. He told local newspapers that about 1,000 campgrounds would be affected by the decision.

Lawyer Fallis indicated that the bottom line of the decision is "all you
can tax is the land!"

MPAC had insisted trailers on the land were to be included in property
assessments. "The government (MPAC) acted without the power of the
legislations" he said.

Municipalities such as South Bruce Peninsula, where Sauble Beach is
located, will have to refund their share of the millions of dollars
collected illegally based on the inflated illegal assessment.

Mr. Lembke said the decision was a victory for his industry which has
suffered serious financial hardship. He indicated that "unlike municipal,
provincial, religious or native campgrounds, private campground operators were singled out by MPAC for the dramatically higher assessments".

"This was very detrimental to our industry and put us in a very unfair
situation. It was not a level playing field" he said calling the court's
ruling "a burden off our shoulders!"

Roger Faulkner, who help lead the fight against the assessment is General Manager of General Coach in Hensall, Ontario. He said his company lost millions of dollars in sales when the taxation issue came to a head two years ago.

Mr. Faulkner said "MPAC would be foolish to appeal something a judge has finally found to be wrong. We have fought long and hard for this, many sleepless nights, but we have persevered."

Municipal officials who collected exhoribtant taxes from the campground owners will now have to solve a major problem in how to raise funds to make the large refunds ordered by the court.

Update

As we reported previously a long legal fight to contest unfair assessments placed on campground owners for park model RVs on their sites ended when an Ontario judge ruled the government illegally included those trailers in the campground assessments.

The milestone court case involved Carson's Camp Ltd. of Sauble Beach, Ontario. They saw taxes jump by more than 400 percent from $24,868 in 2002 to $103,994 in 2003.

The change in method of assessment was enacted by the Municipal Property Assessment Corporation (MPAC) the people who do all the assessing in Ontario and was just placed on privately-owned campgrounds not government, conservation authority or native campgrounds.

The judge's decision was hailed by winning lawyer Peter Fallis of Durham, Ontario as "bullet-proof" from appeal and no doubt many bottles of champagne were opened to celebrate the demise of another Ontario government injustice.

Unfortunately the people at MPAC, some who are now probably wondering if their careers may be ending sooner than planned, decided to appeal anyway which just puts off the action of refunds for another year or two.

Industry representatives still feel that the judgement will prevail
because for an appeal to be successful one has to prove that the judge
committed an error in law. This is highly doubted and the major parties
involved just feel this is a stalling tactic by the government agency.

The result of the original court decision is that municipalities are now
going to have to refund approximately $50 million of money they have
probably already spent. They too have been put in a very difficult position by the incompetence of those who made the decision to tax in this way.

What the appeal will do is give the municipalities a warning and a grace
period before they have to come up with the huge refunds. Perhaps some will be able to cut back expenditures to cover the financial dilemma created by MPAC.

Unfortunately the higher assessment figures will be used to set tax rates
each year until the appeal is completed and the campgrounds' tenants will still have to pay the increased tax assessment fees to the campground owners so that they can remit it to their local municipality.

In an interview with Scope Roger Faulkner, who helped lead the right
against the assessment said "everyone will be refunding the money back to the RV owners once they receive refunds. There's no one that is talking about keeping the money."

Perhaps there are people within the government agency who will use the appeal time to plan for earlier retirements or transfers so they won't be around when the appeal is completed and you know what hits the fan there. We find it difficult to understand how anyone could have been so unfair!

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