Commercial, industrial property reassessments 'absolutely devastating' says Thunder Bay council

The City of Thunder Bay will refund over $2 million in property taxes to several big box stores and industries after the values of those properties were slashed on appeal.

The growing number of larger businesses and industries seeing their property values fall and subsequently paying less in property taxes to the city also means a larger burden on homeowners, according to city councillors.

• Canadian Tire to receive tens of thousands in tax refunds

• MPAC pledges to help Thunder Bay with reassessment problem

• MPAC says its processes more transparent ahead of 2016 assessments

"Frankly, this is devastating to municipalities, it's just absolutely devastating," Coun. Andrew Foulds said at council's meeting on Monday. "This is becoming increasingly difficult as you squeeze municipalities, as you squeeze residential homeowners."

On Monday, councillors voted to accept administration's recommendation that Thunder Bay let the assessment review board issue its ruling on the reassessments without the city's consent. City officials could also have voted to accept the decision outright or challenge it; administration said the last option likely wouldn't change anything and only cost the city more.

"We still need [tax] dollars to provide municipal services," Foulds added, saying that less money coming from large companies means more is shifted to homeowners.

Canadian Tire is set to receive over $1 million in back taxes after the values of its two stores in the city were slashed for each year between 2009 and 2016. Richardson International will get about $570,000 back for three of its properties.

Parrish & Heimbecker, Superior Elevator, Mission Terminal Inc. and Western Grain By-Products Storage will also be refunded.

City staff also advised on Monday that a $785,000 refund is expected for Home Depot as well.

Thunder Bay mayor Keith Hobbs recused himself from Monday's vote, citing a conflict of interest as he sits on the board of the Municipal Property Assessment Corporation. He declined to comment on the assessment issue on Tuesday, as he said it may be a topic of discussion at future MPAC board meetings.

'Hocus pocus'

According to city staff, businesses and industries challenging their assessments isn't a new concept, however, within the past 10 years, they've been more successful at getting property values lowered substantially, meaning larger refunds.

"What's changed is the appellants ... have put forward new concepts to valuation, factors that weren't previously involved," said revenue director Rob Colquhoun.

• Mayors to press MPAC for tax break talks

• MPAC industrial, commercial re-assessments vex tax collectors

"[It's] really just a hocus pocus for in my view a gangster policy of ... transferring taxes from big corporations onto residential properties," said Coun. Paul Pugh.

Officials with MPAC, the body responsible for classifying and assessing all property values in Ontario, have told CBC News that properties like big box stores depreciate quickly because they're hard to sell if they become vacant.

City officials said the money the city has to refund won't affect the 2017 municipal budget as the money was already put aside.