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LETTER: Tax assessment could be rocky road for aggregate companies

Aggregate operations in our area are likely 'grossly underassessed for property tax purposes and are not paying their fair share of property taxes,' laments letter writer
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OrilliaMatters welcomes letters to the editor. This letter is in response to our article, published Dec. 30 titled, City must pay $1.1M to Zehrs in tax settlement.

As indicated in your recent story, property taxes are based on an assessed value determined by the Municipal Property Assessment Corporation (“MPAC”). Both the property owner (in this case Zehr’s) and the municipality have the right to appeal the value assigned to a property.

I came across an article in the Toronto Star (April 16, 2021) whereby Wellington County had successfully appealed properties that were grossly under valued by MPAC and the successful appeal by the municipality resulted in estimated additional tax revenue of approximately $6 million. The situation related to some aggregate operations in Wellington County. 

Residents of Simcoe County and Oro-Medonte in particular are more than familiar with the aggregate mines (and related truck traffic) as there are many such operations throughout our county. A Ministry of Natural Resources and Forests map indicates that there are 18 aggregate mining properties along the Old Barrie Road corridor in Oro-Medonte.

The County of Wellington (Guelph area) was successful in getting the assessed value of these aggregate operations increased from $9,200 to $15,080 per acre a whopping 64 per cent increase. I took a sample of six aggregate mines in Oro-Medonte and the assessed values ranged from about $5,500/acre to $8,600/acre and the average of the six was about $7,300/acre. This is less than the assessed values in the Wellington County before appeal and almost half of the $15,080 value assessed after appeal. 

It would seem to me given our comparable proximity to the GTA, that aggregate operations in our area are grossly underassessed for property tax purposes and are not paying their fair share of property taxes.

If one applies the income approach (in MPAC’s Methodology Guide for Mining Properties) and considers that these aggregate mines are businesses that generate millions of dollars of revenue over the lifespan of the mine, then it is possible and quite likely that the value of the aggregate properties far exceeds $15,000/acre. 

This determination requires access to information that only the aggregate operator would possess – so I have no means to estimate a value based on this type of approach.

Earlier in the year I shared this article with the Chief Administrative Officer of the Township of Oro-Medonte and suggested that this is something the municipality should investigate as a means of increasing it tax revenue. I received no response to this communication. 

Regardless, I believe this is something all municipalities in Simcoe County that have aggregate operations should investigate and consider appealing if they determine these aggregate properties are under valued by MPAC. It is not fair to ask other taxpayers to effectively subsidize these aggregate operations.

The additional tax revenue resulting from a reassessment on these aggregate mines could be well used to improve/repair roads that are heavily used and damaged by the aggregate trucks we all see using area roads.

Doug Varty