By the slimmest of majorities, the Supreme Court of Canada found in favour of the City of Edmonton in applying a standard of reasonableness in a case involving a municipal assessment dispute with a corporate taxpayer.
The SCC released a judgment Friday in Edmonton (City) v. Edmonton East (Capilano) Shopping Centres Ltd. that reinstated a municipal assessment board’s decision to increase taxes on the Capilano Mall in Edmonton. But the court was divided 5-4 as to whether a standard of reasonableness or correctness should be applied, with the majority finding that, as per Dunsmuir v. New Brunswick, “the standard of review is presumed to be reasonableness,” which is deferential to legislative intent.
“The presumption of reasonableness is grounded in the legislature’s choice to give a specialized tribunal responsibility for administering the statutory provisions, and the expertise of the tribunal in so doing,” wrote Justice Andromache Karakatsanis for the majority.
“The appropriate standard of review of the Assessment Review Board’s decision is correctness,” which is concerned with the rule of law, Justices Suzanne Côté and Russell Brown wrote for the minority that included the chief justice. “Expertise is a relative concept. It is not absolute.”
The disagreement over whether the standard of review in the case should be reasonableness versus correctness “shows that that court is still in a little bit of flux, or uncertainty around the question of standard of review,” says Gil Ludwig of Wilson Laycraft in Calgary, which represented the respondent along with Gowling WLG (Canada) in Ottawa. “That is, it still leaves the debate alive in terms of where the law is going around standard of review, in my view.
“Our argument was that on pure question of law and jurisdiction, with the statutory right of appeal to the court on significant questions of law, as the minority said, that is the correct standard,” he adds.
The value of the Capilano Mall in Edmonton was assessed at $31 million in 2011; the company disputed this assessment and sought a reduction in the assessed value to $22 million. The City of Edmonton then discovered what it determined to be an error in its original assessment and requested that the board increase the assessed value to $45 million. The board ultimately increased the assessment to around $41 million. On appeal to the Alberta Court of Queen’s Bench, the Board’s decision was set aside, which was affirmed on appeal to the Alberta Court of Appeal.
There are two important aspects of the Supreme Court’s decision, says Cam Ashmore, a lawyer for the City of Edmonton who argued the case in front of the court. “The first is in the context of assessment law . . . The court essentially held that the longstanding practice of the Assessment Review Board in Alberta — being able to increase assessment when the municipality felt it was too low — was upheld. That made sure that all taxpayers will have to bear their fair share of the tax burden . . . That was longstanding law prior to the court’s decision, so it reverted back to that longstanding law.”
The second important aspect was that the court upheld the standard of reasonableness, he says, “which it had been doing in various cases, across the board and in various contexts ever since the Dunsmuir case came out. This was another case where the reasonable standard was upheld when the tribunal was interpreting what was essentially their home statute, that they had a lot of familiarity with.”
This simplifies the standard of review analysis, Ashmore says. “At least the majority of the Supreme Court continues to recognize that we’re spending too much time arguing about standard of review, and not enough time about the substance of the case.”