Consumers Co-operative Refineries Limited Appellant (Appellant) v. City of Regina and Saskatchewan, 2020 SKCA 111

Court of Appeal for Saskatchewan Docket: CACV3062 Citation: Consumers Co-operative Refineries Limited v Regina (City) , 2020 SKCA 111 Date: 2020-10-01 Between: Consumers Co-operative Refineries Limited Appellant (Appellant) And City of Regina and Saskatchewan Assessment Management Agency Respondents (Respondents) Before: Caldwell, Barrington-Foote and Kalmakoff JJ.A. Disposition: Appeal dismissed Written reasons by: The Honourable Mr. Justice Caldwell In concurrence: The Honourable Mr. Justice Barrington-Foote The Honourable Mr.

Justice Kalmakoff On appeal from: AAC 2016-0002, Regina Appeal heard: October 22, 2019 Counsel: Kurt Wintermute for the Appellant Jayne Kreuger for the City of Regina No one appearing for Saskatchewan Assessment Management Agency Caldwell J.A. I. Introduction [ 1 ] This appeal concerns the 2016 municipal tax assessment of the land only at the Consumers Co-operative Refinery, which is located at 234E 9th Avenue North, Regina, Saskatchewan [Refinery]. A City of Regina assessor [Assessor] assessed the Refinery as non- regulated property, using the market valuation standard.

The market valuation standard involved applying a land size multiplier [LSM] to adjust for the Refinery’s lot size. To calculate the LSM, the Assessor used the same sales of properties from the same neighbourhood (Study Area 5203) as had been used by the assessor in Imperial Oil Limited v Regina (City) , 2016 SKCA 107 , 408 DLR (4th) 46 [ Imperial Oil 2016 ].

In assessment terms, this means the Assessor calculated and used the same base land rate [BLR] and the same LSM curve as had been calculated and used in Imperial Oil 2016 . [ 2 ] In the taxpayer’s appeal of the 2016 assessment, the Board of Revision of the City of Regina [Board] upheld the assessment on the basis that the taxpayer had not established that the Assessor had erred in fact, law or assessment principles (Appeal #2016-27798 (2 May 2016) [ Board Decision ]).

The Saskatchewan Municipal Board Assessment Appeals Committee [Committee] dismissed the taxpayer’s appeal from the Board Decision , also upholding the 2016 assessment ( Consumers Co-operative Refineries Ltd. v Regina (City) , (13 December 2016) AAC 2016-0002, [2017] SMBAACD No 3 (QL) [ Committee Decision ]). [ 3 ] Chief Justice Richards granted leave to the taxpayer to appeal against the Committee Decision on four questions, which may be paraphrased as whether the Committee had erred: (

a) by failing to find that, in light of Imperial Oil 2016 or otherwise, the 105% LSM curve was unreliable and should not have been applied; (

b) by placing the onus on the taxpayer to establish that the 2016 assessment had failed to achieve equity with similar properties; (

c) by applying the equity standard set out under s. 165(4) instead of the equity standard set out under s. 165(5) of The Cities Act , SS 2000, c C-11.1; and (

d) by ignoring or failing to consider relevant evidence, particularly evidence of market value, when determining whether the 2016 assessment of the Refinery had achieved equity with similar properties. [ 4 ] In answer to the first question, I find the 105% LSM curve is unreliable when extrapolated to properties having a manifestly disparate lot size, like the Refinery ( Imperial Oil 2016 ); however, the Board was not empowered to vary the 2016 assessment simply because the Assessor had applied an unreliable LSM ( The Cities Act , s. 210(3) ).

The answer to the second question is that the appellant bears the onus of establishing that an assessment has failed to achieve equity. To answer the fourth question, the Committee did not err by ignoring or failing to consider evidence; rather, the Committee correctly found no reversible error in the Board’s handling of the evidence and in its finding that the taxpayer had failed to establish that the 2016 assessment of the Refinery had not achieved equity. [ 5 ] The third question overarches the appeal but does not itself give rise to a remedy.

The question is whether the equity standard for non-regulated properties, as set out under s. 165(5) of The Cities Act , applies to an assessment of the Refinery. As I read s. 165, the determination of which equity standard to apply depends on the type of property being assessed, not on the valuation standard being applied.

This third question arises because the Committee treated the Refinery as regulated property under The Cities Act and therefore applied the equity standard under s. 165(4) ; whereas, the Assessor had assessed the Refinery as non-regulated property and, therefore, applied the equity standard under s. 165(5) . In the end, I find no error in the Committee’s conclusion that the Refinery is regulated

property and that its assessment is subject to the equity standard set out under s. 165(4). The effect of the difference between the two equity standards is a slight alteration of the remedies available in a municipal tax appeal. Unlike in a non-regulated property assessment appeal, a board of revision and the Committee may use single property appraisal techniques to vary a regulated property assessment ( The Cities Act , ss. 210(1.1) and 226(3) ). [ 6 ] In the result, as I find no reversible error on the part of the Committee, I would dismiss the taxpayer’s appeal with costs to the City in the usual way. II.

Background A. The Cities Act [ 7 ] The Cities Act requires the annual, mass appraisal assessment of all real property within a city (ss. 164(1) and 165(1); Corman Park (Rural Municipality) v 618421 Saskatchewan Ltd. , 2018 SKCA 29 at paras 7 and 11 , 73 MPLR (5th) 1 [ Corman Park ] ). Mass appraisal requires an assessor to use certain standard appraisal methods to prepare assessments for a group of properties instead of individual properties (s. 163(f.3)). The overarching goal of assessment is to achieve equity, as defined by The Cities Act ( ss. 165(3) –(5)).

This statutory law has not changed since Imperial Oil 2016 (see paras 6–10). [ 8 ] The Cities Act allows for only two types of assessment, namely, regulated property assessment and non-regulated property assessment. The Act defines regulated property assessment as including “an assessment for agricultural land, resource production equipment, railway roadway, heavy industrial property or pipelines” (s. 163(h.1)). It defines non-regulated property assessment negatively as “an assessment for property other than a regulated property assessment” (s. 163(f.4)).

If an assessment is not a regulated property assessment, then it is a non-regulated property assessment. The Refinery is zoned as heavy industrial , meaning it is regulated property. Its land-base is categorized as non-primary industrial , a term that does not appear in The Cities Act .

Rather, the land base of the Refinery has been so designated by the Saskatchewan Assessment Management Agency [SAMA]. [ 9 ] Under The Cities Act , each type of assessment has its own statutorily-mandated valuation standard (s. 164.1), namely, the market valuation standard for non-regulated property assessments (s. 163.1(f.1 to f.3)) and the eponymous regulated property assessment valuation standard (s. 163(h.2)): 163 (f.1) “ market valuation standard ” means the standard achieved when the assessed value of property: (

i) is prepared using mass appraisal; (ii) is an estimate of the market value of the estate in fee simple in the property; (iii) reflects typical market conditions for similar properties; and (iv) meets quality assurance standards established by order of the agency; (f.2) “ market value ” means the amount that a property should be expected to realize if the estate in fee simple in the property is sold in a competitive and open market by a willing seller to a willing buyer, each acting prudently and knowledgeably, and assuming that the amount is not affected by undue stimuli; (f.3) “ mass appraisal ” means the process of preparing assessments for a group of properties as of the base date using standard appraisal methods, employing common data and allowing for statistical testing; … (h.2) “ regulated property assessment valuation standard ” means the standard achieved when the assessed value of the property is determined in accordance with the formulae, rules and principles set out in this Act , the regulations made pursuant to this Act , the assessment manual and any other guideline established by the agency to determine the assessed value of a property; [ 10 ] As can be seen, the definition for market valuation standard states its requirements, including that assessed value must be “an estimate of the market value” of the property, whereas the regulated property assessment valuation standard refers to documents external to the statute by incorporating the “assessment manual and any other guideline established by [SAMA]”.

B. The Manual and other guidelines established by SAMA [ 11 ] Relevant to this appeal, SAMA has adopted the Saskatchewan Assessment Manual [ Manual ] and a Cost Guide ( SAMA’s 2011 Cost Guide , version 1.1 (April 2012) [ Cost Guide ]) under s. 163 (h.2) of The Cities Act . These documents delineate standard appraisal methods for assessors to follow when conducting mass appraisals.

Under the Manual , the land base of the Refinery is designated as non- primary industrial land and assessed using the market valuation standard (Document 1.1.5) notwithstanding that it is regulated property under The Cities Act . [ 12 ] For non-regulated property, to which the market valuation standard typically applies (s. 164.1(2)), an assessment is a principled approximation of what a property would sell for based on the actual sale prices of comparable properties adjusted for the specific characteristics of the subject property.

This approach requires an assessor to examine information about the properties that have sold in the neighbourhood of the subject property (or, where there are an insufficient number of such sales, in a comparable neighbourhood) and to calculate a price per unit of comparison (where a unit of comparison may be land area, land frontage, land unit, building unit or condominium unit). The price per unit of comparison is known as a base land rate or BLR. For property used for industrial purposes, the unit of comparison is land area as measured in square feet or acres ( Cost Guide , s. 2.2).

[ 13 ] The assessor then “site adjusts” the BLR to account for the specific characteristics of the subject property, i.e., those characteristics that distinguish it from the properties that make up the dataset used to calculate the BLR, e.g., lot size, lot shape (depth, size, irregularity, corner influence), location, infrastructure, environmental contamination, etc. An assessor may make more than one site adjustment “to account for any gain or loss in value that is not already accounted for in the base land rate or another site adjustment”.

An assessor may determine a site adjustment on the basis of the “sales comparison method, residual lump sum site improvement adjustment, comparable neighbourhood analysis, or specified rate schedules” ( Cost Guide , s. 2.3). [ 14 ] The Cost Guide describes three of the methods for determining a site adjustment in this way: Sales Comparison Method Sales comparison method may be used to determine site adjustments where there are sufficient sales within the neighbourhood to calculate a variation in sale price attributable to a specific site characteristic.

Comparable Neighbourhoods Where there are insufficient sales within the neighbourhood to calculate a site adjustment, comparable neighbourhoods may be used to calculate the adjustment if there is a neighbourhood comparable to the subject neighbourhood where there are sufficient sales to determine an adjustment. The site adjustment determined for the comparable neighbourhood may be applied to comparable land in the subject neighbourhood.

Rate Schedules Rate schedules are used to determine unit value, factored and lump sum site adjustments where there are insufficient sales in the subject or comparable neighbourhood for the sales comparison method. [ 15 ]

Section 2.5 of the Cost Guide contains the valuation procedures for determining size adjustments, which apply where a property is being valued on the basis of square footage or acreage. This is the basis for the valuation at issue in this appeal.

If the assessor determines that the sale price of a larger parcel in a neighbourhood is less per unit (i.e., per square foot or acre) than the sale price of smaller parcels, then the assessor must apply a land size multiplier (or LSM) when assessing the market value of a property that is “other than the standard size parcel”, which may be a specific parcel size or a size range. [ 16 ] To do this, the assessor first determines the standard size parcel for the neighbourhood in question as well as the “standard size parcel sale price per unit” in accordance with s. 2.2 of the Cost Guide , which addresses the calculation of a BLR under the sales comparison method.

The sales comparison method is “the primary method of land valuation for property valued using the cost approach”. Under the method, a BLR may be determined by the following calculation procedure: 1. Identify land sales, which are representative of the typical parcel in the neighbourhood. 2. Determine the units of comparison. 3. Determine the sale price per unit of comparison for each land sale: i. Determine the land sale price. ii. Determine the number of units of comparison. iii. Calculate the sale price per unit of comparison by dividing the land sale price by the number of units of comparison. 4.

Calculate the base land rate for the neighbourhood by selecting the most probable sale price per unit of comparison. ( Cost Guide at 2.2) [ 17 ] However, where there is insufficient or no sales data available in a neighbourhood for the purposes of reliable BLR calculation, s. 2.2 of the Cost Guide provides: Where there are insufficient land sales in the neighbourhood to determine a reliable base land rate, the number of sales may be supplemented with, for example, the following sales: • older sales adjusted for time; • land residual sales; and/or • sales from a comparable neighbourhood.

The allocation method of site valuation may be used if there are no sales of land available for comparison. … Land Residual Sales Land residual sales may be used as a supplement or alternative to land sales in the application of the sales comparison method for determining the base land rate. Land residual sales are used where:

• land sales in both the subject and comparable neighbourhoods are limited; • there are sufficient improved sales in the subject neighbourhood.

The sale price of land using land residual sales is determined by application of the following formula: SP LAND = SP TOTAL - RCNLD IMPR [ sic ] where: SP LAND = sale price of the land SP TOTAL = sale price of an improved land parcel RCNLD IMP [ sic ] = replacement cost new less physical deterioration of improvements on the improved land parcel Allocation Method The allocation method may be used as an alternative to the sales comparison method for determining the base land rate.

The allocation method is used where: • there are limited land sales in the subject neighbourhood; • there are sufficient land sales and improved sales in a comparable neighbourhood.

The sale price of land is determined by application of the following formula: SP LAND = SP TOTAL x LV COMP ______ PV COMP where: SP LAND = sale price of the land SP TOTAL = sale price of an improved land parcel in the subject neighbourhood LV COMP = land value in a comparable neighbourhood PV COMP = value of improved land parcels in the comparable neighbourhood [ 18 ] Returning to size adjustments under s. 2.5 of the Cost Guide , the assessor next calculates the sale price per unit for “all comparable land sales in the neighbourhood”.

By dividing this number by the standard sale price, the assessor calculates a “comparable sale price to standard sale price ratio”, which the assessor then graphs ( y -axis) along with parcel size ( x- axis).

The Cost Guide then directs the assessor to determine an LSM curve “that best fits the comparable sale price to standard sale price ratio” using the following formula: where: Y = comparable sale price to standard sale price ratio for each land sale A STD = area of the standard parcel A COMP = area of the comparable land sales u = land size multiplier curve [ 19 ] After plotting the graph that “best fits” the ratio, the assessor determines the LSM for the subject property using this formula: where: LSM = land size multiplier ASTD = area of the standard parcel ASUB = area of the subject u’ = best fit land size multiplier curve [ 20 ] If there are “sufficient land sales in a neighbourhood to establish a reliable land size multiplier”, the Cost Guide directs assessors to use the sales comparison method to determine a size adjustment (s. 2.5).

However, if there are “insufficient land sales in the neighbourhood and sufficient land sales in a comparable neighbourhood to establish a reliable land size multiplier”, the Cost Guide directs assessors to use the LSM from the comparable neighbourhood (s. 2.5). In each case, the assessor must determine whether the LSM is “reliable”. [ 21 ] Although the Cost Guide speaks to alternatives approaches or methods where there is insufficient data to generate a reliable

BLR, it is silent on what to do if there are insufficient sales in the neighbourhood of the subject property and insufficient sales in a comparable neighbourhood to generate a reliable LSM. C.

Imperial Oil 2003 and Imperial Oil 2016 [ 22 ] The question of whether the 105% LSM curve used by the Assessor in the 2016 assessment of the Refinery is reliable when applied to properties having a much larger lot size than the properties in the sales dataset was determined by this Court in Imperial Oil 2016 —it is not reliable. [ 23 ] The question has its genesis in Imperial Oil Ltd. v Regina (City) , 2003 SKCA 81 , 238 Sask R 204 [ Imperial Oil 2003 ], when the Manual and Cost Guide allowed for the use of a default 130% LSM curve.

That is, if there were insufficient sales in both the subject property’s neighbourhood and in comparable neighbourhoods, the Manual then in use directed assessors to apply a default 130% LSM curve when assessing the subject property. [ 24 ] In Imperial Oil 2003 , the Court ruled that the size disparity between, on the one hand, the properties in the sales dataset from a comparable neighbourhood, which the assessor had used to generate an LSM, and the subject property, on the other hand, was “so great” that the LSM was unreliable by necessity (at para 7).

Owing to this size disparity and a paucity of comparable sales, the Court held in Imperial Oil 2003 that the subject property ought to have been assessed using the default 130% LSM curve. [ 25 ] Thirteen years later, the reliability of an LSM again came before this Court in Imperial Oil 2016 , dealing with the same subject property and comparable neighbourhood as had been addressed in Imperial Oil 2003 . In the meantime, however, the Legislature had amended The Cities Act and SAMA had amended its Manual and other guidelines it had established for determining the assessed value of a property.

Importantly, SAMA had eliminated the default 130% LSM curve from the Cost Guide , leaving no default and no direction to assessors faced with circumstances where both the subject property’s neighbourhood and comparable neighbourhoods had insufficient sales to establish a reliable LSM.

Furthermore, the Legislature had modified how an assessor was to achieve equity in non-regulated property assessment by legislating that they must apply the market valuation standard so that assessments “bear a fair and just proportion to the market value of similar properties” ( The Cities Act , s. 165(5) ). [ 26 ] In Imperial Oil 2016 , this Court confirmed that an LSM derived from the sales of comparatively small parcels of land in Study Area 5203 was unreliable when extrapolated to much larger properties.

Nonetheless, the evidence in that case also established that equity had been achieved in the assessment of the subject property when compared to the assessment of similarly large industrial parcels (s. 165(5)), in the strictly technical sense that all such parcels had been assessed using the same unreliable LSM (at para 48). Accordingly, since the assessor in Imperial Oil 2016 had technically achieved equity, the Court found had been no basis in law for the Board or the Committee to interfere with the assessment. D.

The Refinery [ 27 ] The Refinery is an oil refinery situated on a 550.229 acre parcel of land zoned as IC (Heavy Industrial). Heavy industrial properties are regulated property under The Cities Act ( s. 163 (h.1)); however, SAMA has classified the land base of the Refinery as non- primary industrial land under the Manual . [ 28 ] The Refinery is situated in the neighbourhood of Study Area 9900 [SA9900]. SA9900 is comprised of large industrial properties but they sell rarely and, as such, there is generally insufficient sales data upon which to calculate a reliable BLR for SA9900 or a reliable LSM. E.

The 2016 Assessment of the Refinery [ 29 ] As in Imperial Oil 2016 , the Assessor in this case noted there were insufficient sales in SA9900 to calculate a reliable BLR. Accordingly, the Assessor looked elsewhere and determined that Study Area 5203 [SA5203], which is comprised of small industrial properties, was a comparable neighbourhood having sufficient sales to generate a reliable BLR. [ 30 ] The Assessor found that 31 properties had sold in SA5203 between 2007 and 2010 [SA5203 Dataset].

Of these, 11 were zoned IA (Light Industrial), 17 were zoned IB (Medium Industrial) and 3 were zoned IP (Prestige Industrial), but none were zoned IC (Heavy Industrial). Of those 31 properties, 28 ranged in size from 0.5 of an acre to 2.2 acres. The remaining three were 5.0, 9.0 and 10.9 acres in size. The Assessor calculated the properties in the SA5203 Dataset has having a median size of 1.24 acres and an average size of 1.99 acres, with sale prices ranging from $3.38 to $8.02 per square foot.

Using this information, the Assessor established that a standard parcel size of 1.00 acre would have a BLR of $5.10 per square foot. [ 31 ] The 550.229 acre lot size of the Refinery distinguished it from the typical property in SA5203 as well as the SA5203 Dataset. Following the Cost Guide , the Assessor calculated an LSM of 105% based on the SA5203 Dataset. Practically speaking, a 105% LSM curve translates to a slight decrease in the price per unit as lot sizes increase; whereas, for example, a 130% LSM curve translates into a greater decrease in the price per unit as lot sizes increase.

The Assessor statistically tested the 105% LSM against the SA5203 Dataset, finding it produced an assessment-to-sales ratio [ASR] of 1.00 and a coefficient of dispersion [COD] of 16.31%. On this basis, the Assessor concluded the 105% LSM curve was reliable (A0675). [ 32 ] Using the 105% LSM curve, the Assessor assessed the Refinery as having a total value of $239,796,700, with the buildings valued at $154,738,487, the land valued at $85,058,286 (including pipelines valued at $4,104,745) (Field Sheet Report). The taxpayer appealed to the Board only against the assessment of the land, minus pipelines.

In these reasons, reference to the Refinery refers to its land base only. F. Board Decision

[ 33 ] The taxpayer appealed against the 2016 assessment of the Refinery to the Board on the following grounds: A. The Subject’s land value is too high and needs to be reduced. B. The Land Size Multiplier (LSM) is not correctly adjusting the estimated valuation to accurately account for the Subject’s 550 acres of land. C. The Standard Parcel Size has been determined incorrectly. D. Equity has not been maintained as the assessment does not meet the parameters established in the market valuation standard.

By way of relief, it asked the Board to employ the historical default 130% LSM curve. [ 34 ] The Board identified the main issue as being whether the Assessor had erred by applying the 105% LSM when assessing the Refinery. It reviewed the rules and legal principles applicable to assessments, noting that assessors may only use legislatively prescribed methods of appraisal. It observed that the overriding principle in assessment is equity, which is achieved by applying the “directed method of assessment uniformly and fairly” (s. 165(4)).

The Board noted that its role under The Cities Act is to review an assessment for error and, when doing so, it is limited by s. 210(3), which prevents it from altering an assessment if equity has been achieved with similar properties, and by s. 210(1.1), which prevents it from varying a non-regulated property assessment using single property appraisal techniques. [ 35 ] Turning to the circumstances at hand, the Board noted the prescribed assessment principles and procedures had changed since Imperial Oil 2003 , when the 130% LSM default curve had existed.

On this basis, the Board said it could not grant the relief requested. Notably, when the Board heard this matter, this Court’s decision in Imperial Oil 2016 was under reserve. Nonetheless, while it recognised that Imperial Oil 2016 could be determinative of the matter, the Board also understood that it was legally required to make a timely decision based on the evidence before it ( The Cities Act , s. 210(4) ; Corman Park at paras 45–47 ). [ 36 ] In reviewing the 2016 assessment, the Board stated there was no evidence to demonstrate that the Assessor’s calculation of the 105% LSM was in error.

It noted the large variance in lot size but said “size variance in isolation is not indicative of an error” because “[s]ize is but one of many factors the Assessor must consider, and it is not the primary consideration”. In upholding the 2016 assessment, the Board stated: The Assessor provided the methodology for his assessment. He complied with the requirement of statistical testing. He has met all of the components of the market valuation standard. He used mass appraisal to estimate the fee simple value of the property.

The assessment reflects typical market conditions for similar properties, and the evidence shows that it meets the quality assurance standards established by order of the Agency. The Appellant submitted that if he had demonstrated an error, then that was sufficient and the Board should find a remedy. This presupposes that there is evidence demonstrating an error. The Board has limited powers as set out in

section 210 of the Act . It cannot allow an appeal with no remedy. While there may be the perception that due to the large size of this parcel there must be a more significant curve that was not borne out by the evidence. The market data revealed otherwise. Finally, the Board must pay deference to the Assessor’s discretion as stated in Regina (City) v Laing Property Corp ., supra . Even if the Board was of the view that there had to be some error because the LSM might be unreliable, the Assessor testified that he was of the opinion that it is reliable.

The matter of reliability, in this circumstance, is within the Assessor’s discretion. The Board is not prepared to interfere with the Assessor’s exercise of discretion in this respect. As a result, the Board finds no error in the assessment. The assessment is upheld. G. The Committee Decision [ 37 ] The taxpayer appealed from the Board Decision to the Committee on grounds that the Board had erred by: 1. Failing to apply the decision of the Saskatchewan Court of Appeal in [ Imperial Oil 2003 ]. 2.

Finding that sales of 31 parcels up to 10.9 acres in size and with a standard parcel size of one acre, were sufficient to establish a reliable land size multiplier (LSM) for all parcels in the neighbourhood, including the subject parcel of approximately 550 acres. 3. Finding that the “the assessment reflects typical market conditions for similar properties” to the subject land in the absence of any market evidence or sales of parcels larger than 10.9 acres on which to base that conclusion. 4.

Finding that the question of whether an LSM curve may be reliably applied to a parcel of land that is 50 times larger than the largest sale used to develop the LSM and 550 times larger than the standard parcel size, is a matter within the Assessor’s discretion. 5.

Finding that such a large size variance was not evidence that the 105% LSM curve was in error or unreliable, by finding that location and date of sale are of primary importance over size, when: a. the Assessor had no sales data over 10.9 acres on which to base a determination of the relative influence of larger size [; and] b. the relative importance of factors was irrelevant to the question before the Board, which was the influence of much larger size in light of the generally accepted assessment principle that per unit price decreases with increasing size, all other factors being equal. 6.

Failing to find that the Assessor had not considered the application of the comparable neighbourhood method in Document 2.5 of the Cost Guide to determine the LSM for very large parcels of land in Industrial Study Area 5203. 7. Finding that the subject 550 acre parcel serviced for a single purpose, zoned IC-Heavy Industrial and whose highest and best use as

vacant land included subdivision for industrial and warehouse uses, was not more comparable to sales of large parcels of developmentland both in the city and in the adjacent Rural Municipality, than to the sales of small, subdivided and individually serviced industrialparcels used by the Assessor and zoned 1A Light Industrial to 1B Medium Industrial, while acknowledging that it was unknown how theywould compare if and when adjusted. 8.

Failing to consider the maximum assessments prescribed in Document 1.1.5 of the Saskatchewan Assessment Manual for comparableheavy industrial land. [38] The parties agreed to wait until this Court had released its decision in Imperial Oil 2016 before proceeding with the appealbefore the Committee. In that appeal, the Committee found that Imperial Oil 2016 answered the first five grounds of appeal, noting that“equity can still be achieved whether or not the LSM curve is reliable” (at para 22, citing Imperial Oil 2016 at para 48).

The Committeealso found no evidence to suggest the Assessor had failed to follow The Cities Act when assessing the Refinery. [39] In upholding the Board Decision, the Committee stated: [30] We find the Board reasonably believed the MVS [market value standard] was met and the Appellant did not meet their burden ofproof, on a balance of probabilities. The Appellant did not show the Board or the Committee how equity was not met. [31] We find the Board did not make a mistake when it upheld the original assessed value because there is no evidence to indicate theassessment is incorrect.

The assessment is presumed correct unless an assessor makes an error of fact, law or assessment principles[Regina (City) v Laing Property Corp., (SK CA), [1994], 128 Sask R 29 (CA)]. CONCLUSION: [32] The Committee dismisses the appeal and upholds the original assessed value of $239,796,600. III. Analysis [40] The Court’s jurisdiction to hear this appeal is found in s. 33.1 of The Municipal Board Act, SS 1988-89, c M-23.2, and the rightto appeal is subject to leave being granted by a judge of this Court.

On September 26, 2017, Richards C.J.S. granted leave to the taxpayerto appeal on the questions paraphrased above. As a taxpayer may only appeal on questions of law and jurisdiction, the standard of reviewon all questions is correctness: Cadillac Fairview Corp.

Ltd. v Saskatoon (City), 2000 SKCA 84 at para 26, 199 Sask R 72; Gary L.Redhead Holdings Ltd. v Swift Current (Rural Municipality), 2017 SKCA 47, [2017] 9 WWR 296. [41] Given that the answer to the second and third questions, regarding the onus of proof and the correct standard of equity to applyin the circumstances, affect the analysis on the first and last questions, I will answer the questions in an order that assists with the analysis. A.

Standards of equity (ss. 165(4) and (5) of The Cities Act) [42] In appellate terms, the question posed of this Court is whether the Committee erred in selecting the regulated propertyassessment standard for equity set out under s. 165(4) instead of the non-regulated property assessment standard for equity, which is setout under s. 165(5) of The Cities Act. Both parties say the standard is that articulated under s. 165(5), although they differ on whether theCommittee actually applied it.

However, I find the applicable standard is that found under s. 165(4) and, therefore, the Committee did noterr in its selection of the standard of equity to apply. [43] The Committee’s reasoning on this point was as follows: Property Valuation [15] The Cities Act, SS 2002, c C-11.1 [the Act] states that “regulated property assessments shall be determined according to theregulated property assessment valuation standard” [s. 164.1(1)]. [16] The regulated property assessment valuation standard is The standard achieved when the assessed value of the property is determined in accordance with the formulae, rules andprinciples set out in this Act, the regulations mare pursuant to this Act, the assessment manual and any other guideline establishedby the agency [SAMA] to determine the assessed value of a property [163(h.2), the Act] [emphasis added]. [17] The Saskatchewan Assessment Manual (Saskatchewan Assessment Management Agency) states “[T]he assessed value for non-primary industrial land shall be determined using the market valuation standard” (MVS) (Document Number 1.1.5). [18] The MVS is achieved when the assessed value of property: i. is prepared using mass appraisal; ii. is an estimate of the market value of the estate in fee simple in the property; iii. reflects typical market conditions for similar properties; and iv. meets quality assurance standards established by order of the agency [SAMA] [s. 163(f.1), the Act]. [19] The valuation of similar properties must meet the MVS and be treated the same because property assessment must be equitable [s.165(3), the Act].

The Act states the application of “the regulated property assessment valuation standard uniformly and fairly” achieves

equity for regulated property assessments [s. 165(4)]. [20] When assessors determine assessed values they make decisions about various things depending on the property, such as LSM curves, comparable neighbourhoods, and size of lots. In the current case, LSM curves, comparable neighbourhoods, and size of lots were all part of the process the Assessor used in order to determine the assessed value.

In our view, the aggregate total of these decisions was that equity was achieved. [21] When equity is achieved, “as assessment shall not be varied on appeal if equity has been achieved with similar properties” [ s. 210(3) , the Act ].

The Court confirmed this in Imperial Oil 2016 : The Committee was not empowered to set aside the Board’s decision (and the Board was likewise not empowered to set aside the Assessor’s assessment) in circumstances where equity, as defined in s. 165(5) of The Cities Act , SS 2001, c C-12.01 , had been achieved with similar properties, i.e. , where the assessment bears a fair and just proportion to the market value of similar properties as of the applicable base date (para 2). [22] The Court said the LSM curve was not reliable, but an unreliable LSM curve does not mean equity cannot be achieved.

We note in the current case, equity can still be achieved whether or not the LSM curve is reliable. Nonetheless, the Board did have the Assessor’s evidence that four of five LSM curves for other industrial neighbourhoods were also 105%, with the fifth being 125%.

And, there is also the prime directive of assessments set forth in s. 165(3) of The Cities Act : “The dominant and controlling factor in the assessment of property is equity.” This directive requires assessors to apply the market valuation standard so that non-regulated property assessments “bear a fair and just proportion to the market value of similar properties” [s. 165(5)].

The Board also had the City's uncontradicted evidence that the Land had been assessed “equitably” with other large industrial parcels that fell within and outside Study Area 5203, including a refinery lot and other tank farm lots ranging in size from 99.39 acres (4,329,428 square feet) to 550.23 acres (23,968,018 square feet).

This single bit of evidence is important because, under ss. 210(3) and 226(3.1), the Legislature has said that “an assessment shall not be varied [by the Board or the Committee, respectively] on appeal if equity has been achieved with similar properties” [ Imperial Oil 2016 , para 48]. [23] The subject property is unique as there are no other properties like it in Regina. In the current case, the Assessor knew there were no sales of similar properties larger than 10.9 acres and he chose the Ross Industrial neighbourhood as a comparable neighbourhood.

The Assessor applied a 105% LSM curve to account for size and the resulting statistics were an assessment to sales ratio of 1.00 and a coefficient of dispersion of 16.31%.

Larger LSM curves resulted in worse results. [24] The Court upheld Ross Industrial neighbourhood as a comparable neighbourhood for the subject property: The City uses Study Area 5203 [Ross Industrial Park] to value ‘most industrial properties [including] those zoned IC (Heavy Industrial) such as the [subject property] ... given the narrow ground of appeal, this Court must take it as a fact that Study Area 5203 is a comparable neighbourhood containing a group of similar properties relative to the Land ( Imperial Oil 2016 , para 12). [25] The Appellant believes the Assessor had an insufficient number of sales to establish a reliable LSM and he should have considered the urban holding neighbourhood.

The Appellant also suggests that Kramer Ltd. v Rural Municipality of Sherwood No. 159 and Saskatchewan Assessment Management Agency , 2003 SKCA 121 [ Krame r] obliges the Assessor to use the urban holding neighbourhood. Kramer does not do that – Kramer means that assessors must consider influential factors – size is an example of only one influential factor. Others include but are not limited to zoning, servicing, and location. [26] We agree with the City that Mr.

Lawrek, expert witness for the Appellant before the Board in the current case, “never said that the Assessor’s sales were not comparable to the Subject Property.” Mr. Lawrek used parameters that the Assessor could not, as the Board identified. His sales differed from the subject property with regards to zoning, use, services, and location. The only way Mr. Lawrek’s sales data was comparable was with regards to size. The Board’s decision states: Mr. Lawrek’s appraisal is not restricted by the rules of mass assessment appraisal, and he readily acknowledge that.

He was able to analyze sales data past the base date or cut-off date by which the Assessor is bound.

He was also able to use sales data for land sales outside the City ... and land that carries with it differences in zoning, and land sales that had not been adjusted for time” (p. 3, para 6). [27] The Appellant suggests the Assessor could go outside the municipality to find more sales, which would result in a more reliable LSM. “[G]iven the similarity of markets and [highest and best use] for the subject property with comparable ‘primary industrial’ land in the rural Municipality of Sherwood, applying the regulated rate of $38,500 per acre would also reflect a more equitable valuation.” [28] The Board disagreed with the Appellant: “The Board is not convinced that this is correct.

It [RM of Sherwood] is a different market with different factors at play” (p. 8, para 5). [29] We can find no evidence the Assessor did not follow the legislation in determining the assessment for the subject property. The City is not obliged to go outside its boundaries for other data.

Under The Assessment Management Agency Act , SS 1986, c A-28.1 “ unless an agreement is entered into with the agency [SAMA] pursuant to clause 12(2)(a), Regina, Saskatoon, Moose Jaw and Prince Albert are responsible for carrying out their own valuations and revaluations in accordance with the appropriate municipal Act and any rules, orders and manuals that the agency may make or establish” [s. 22(2)]. [30] We find the Board reasonably believed the MVS was met and the Appellant did not meet their burden of proof, on a balance of probabilities.

The Appellant did not show the Board or the Committee how equity was not met. [ 44 ] As I read the Committee Decision , the Committee did more than merely quote s. 165(4); it considered s. 165(4) to be the correct standard of equity to apply to gauge whether it or the Board were entitled to interfere with a regulated property assessment. I am not persuaded the Committee erred in this regard. [ 45 ] I have observed that The Cities Act sets out two types of assessment (s. 164.1) and states that, for all assessments, the dominant

and prevailing factor is equity (s. 165(3)). Equity, however, is achieved differently under regulated property assessments and non- regulated property assessments, regardless of the valuation standard to be achieved by the assessment itself. [ 46 ] The Refinery is zoned as heavy industrial property. An assessment for heavy industrial property is a regulated property assessment ( The Cities Act , s. 163 (h.1)). Regulated property assessments are carried out using the regulated property assessment valuation standard (s. 164.1(1)), which incorporates the Manual and the Cost Guide (s. 163(h.2)).

The Manual states that heavy industrial land can include both primary industrial land and non-primary industrial land (Document 1.1.5). It is uncontroverted that the Refinery is non- primary industrial land, which is defined as “heavy industrial land located in a city or located at an oil or gas well, a refinery or an upgrader” (Document 1.1.2).

Closing this circle, the Manual directs that “[t]he assessed value for non-primary industrial land shall be determined using the market valuation standard” (Document 1.1.5). [ 47 ] Statutorily, the assessment of the Refinery, as a heavy industrial property, is a regulated property assessment.

Although the Manual directs assessors to assess non-primary industrial land using the market valuation standard, this direction does not alter the type of assessment being conducted under the statute and, therefore, does not alter the standard of equity that must be achieved under that assessment. [ 48 ] As the Refinery is regulated property, I find the Committee did not err when it applied the standard of equity legislated for regulated property assessments under s. 165(4) of The Cities Act . B.

Onus of proof [ 49 ] The taxpayer submits the Committee erred when it suggested the taxpayer had the onus of establishing that equity had not been achieved under the 2016 assessment. It submits that, once it had established error on the part of the Assessor—i.e., by the use of an unreliable LSM—the burden in the appeal before the Board shifted to the City to prove that the 2016 assessment was nonetheless correct or had achieved equity. The City responds by stating that, as a result of Imperial Oil 2016 , the use of an unreliable LSM curve is not a material error if equity has been achieved.

Since the taxpayer bears the burden of proving a material error has occurred, the City submits it follows that the taxpayer also has the burden of establishing that equity had not been achieved. [ 50 ] It is well established that an appellant taxpayer bears the initial onus of establishing, on a balance of probabilities, that an assessor has erred in fact, law or assessment principle and practice: Saskatoon (City) v Victory Majors Investments Corporation , 2020 SKCA 59 at para 62 , citing Sasco Developments Ltd. v Moose Jaw (City) , 2000 SKCA 90 at para 19 , 199 Sask R 91 [ Sasco ]; Estevan Coal Corporation v Estevan (Rural Municipality No. 5) , 2000 SKCA 82 , [2000] 8 WWR 474 [ Estevan Coal ]; Corman Park at paras 33 and 37 ; see also City Centre Equities at para 129.

The onus first falls on the taxpayer because, as Sherstobitoff J.A. wrote in Estevan Coal , the board of revision must presume that an assessment is correct until an error has been shown (at para 31; see also Saskatoon (City) v Walmart Canada Corp. , 2018 SKCA 2 at para 69 [ Walmart 2018 ] ; 959630 Alberta Inc. at para 11; HDL Investments Inc. v Regina (City) , 2009 SKCA 138 at para 32 , 343 Sask R 87). [ 51 ] The authority of a board of revision, the Committee and this Court to vary an assessment on appeal is curtailed by the express limitations on the exercise of appellate remedial powers set out under s. 210(3) and s. 226(3.1).

Those provisions prohibit boards of revision and the Committee, respectfully, from varying an assessment “if equity has been achieved with similar properties”. In Imperial Oil 2016 , the Court held that an error does not become a material error unless “it has affected the achievement of equity with similar properties” (at para 52).

However, the issue of onus, or the question of which party has the burden to prove that equity has or has not been achieved, was not raised in Imperial Oil 2016 . [ 52 ] To address that point, once an appellant taxpayer has established an error that could be material, the onus shifts to the municipality to prove that the assessment is nonetheless correct or that equity has nonetheless been achieved (see Walmart 2018 at paras 71 and 118; Kramer Ltd. v Sherwood (Rural Municipality) No. 159 , 2003 SKCA 121 at para 26 , 241 Sask R 67 [ Kramer ]).

In Walmart 2018 , Whitmore J.A. found an improper application of the market valuation standard was a material error that shifted the onus, stating: “Where the material error relates to the MVS, equity has prima facie not been achieved and the Assessor bears the onus of demonstrating otherwise” (at para 71). [ 53 ] This Court has long recognised the difficulty—and, in some cases, the impossibility—of a taxpayer obtaining the evidence necessary to prove that a mass appraisal assessment is incorrect or has not achieved equity.

Therefore, whenever a taxpayer has established on a balance of probabilities that an assessor has committed an error that could affect whether equity has been achieved, the burden shifts to the municipality to prove that equity has nonetheless been achieved.

Justice Sherstobitoff provided the following reasoning for the shift of the onus ( Estevan Coal at paras 41–44 ): [41] The Respondent cites a passage from Laing which states that “no evidence was adduced ... to show that the assessed value of this building did not bear a fair and just relationship to the assessed value of other such buildings in the City or indeed of any other improvements.” From this, the respondent wishes us to conclude that the appellants must present evidence that the values at which their buildings were assessed are unjustly higher than others. [42] However, in Laing, the assessor followed the assessment manual in the same way as it was followed for all other similar buildings.

Therefore, in the absence of evidence to the contrary, the assessment must obviously be considered equitable. The corollary is that where, as here, the assessment manual was not complied with the assessment must be considered prima facie inequitable. [43] Furthermore, Laing did not deal with the burden of proof in relation to the issue. It dealt with the power of the Committee to alter an assessed value without having regard to the limits imposed by the remedial

section in the relevant statute. [44] In

summary, where the assessor has followed the assessment manual the burden of proving inequity will usually fall on the taxpayer; where the assessor has not followed the assessment manual the burden of proving equity will usually fall on the assessor. (Emphasis added)

While there was but a single, statutory standard of equity at the time of Estevan Coal, the decision stands as good authority for both thepresumption that equity has been achieved and for shifting the onus where that presumption has been brought into question. [54] The issue of shifting the onus in present case is complicated by the absence of guidance in the Cost Guide as to what assessorsshould do when they cannot calculate a reliable LSM. In such circumstances, if assessors are obliged by the Cost Guide to apply an LSM,they will necessarily have to calculate and apply an unreliable LSM.

Nonetheless, assessors must exercise their judgment in this regard toensure that they meet the market valuation standard and so as to achieve equity in the assessment. [55] In this case, the taxpayer submitted evidence showing that the LSM was unreliable and that the Refinery had been significantlyover-assessed when compared to its market value. On its own, the latter is not enough to show error, “as mass appraisal will alwaysprovide assessments that will vary from actual value” (Walmart 2018 at para 89).

However, this evidence suggests that it was notreasonable for the Assessor to apply the unreliable 105% LSM in these circumstances. In other words, the taxpayer has done more thansimply suggest that the actual value of the Refinery is significantly less than its 2016 assessment; the taxpayer provided evidenceindicating the 2016 assessment of the Refinery might not “reflect typical market conditions for similar properties”.

This could besufficient, on a balance of probabilities, to show prima facie that the 2016 assessment of the Refinery had not achieved equity and,therefore, could be sufficient to shift the onus and evidentiary burden to the City to show that the assessor had nonetheless complied withapplicable assessment principles and that equity had been achieved in the circumstances. [56] Accordingly, I find that, to the extent the Committee suggested the taxpayer had not displaced the onus on an appellant in thesematters, the Committee erred. C.

Evidence of market value [57] The taxpayer submits the evidence it put before the Board called into question whether the parcels in the SA5203 Dataset weretruly comparable with or similar to the Refinery. If not comparable, the taxpayer says its evidence spoke to whether the market valuationstandard had been met and whether equity had been achieved. [58] The taxpayer states that, while the Board understood the purpose of this evidence, the Committee did not and, therefore, failedto give it any weight.

Additionally, the taxpayer says the Board and the Committee both erred by dismissing its evidence of market valuebased on single property appraisal techniques. It submits that taxpayers are entitled to rely on evidence of market value and marketconditions because they typically do not have access to the data necessary to prove an assessment has overvalued a property or has failedto achieve equity.

There is merit to aspects of the taxpayer’s argument. [59] In resisting against these contentions of error, the City says the Committee did not ignore or fail to consider the taxpayer’sevidence but rather rejected it as irrelevant, because lot size was the only similar characteristic between the appraiser’s market evidenceand the Refinery. [60] To begin, the taxpayer correctly asserts that it would be an error of law if the Board or the Committee were to overlook orignore relevant evidence (P.S.S.

Professional Salon Services Inc. v Saskatchewan Human Rights Commission, 2007 SKCA 149 at para 68,[2008] 5 WWR 440, leave to appeal to SCC refused, (SCC)).

While the function of the Committee is to review boardof revision decisions for error, in doing so the Committee may itself err if it fails to find that a board had ignored or failed to considerrelevant evidence, when that had occurred at the board level (Ipsco Inc. v Sherwood (Rural Municipality No. 159), 2003 SKCA 122 atparas 33–34, 241 Sask R 39). [61] Nonetheless, not all evidence proffered by a party in an assessment appeal will necessarily be relevant or material.

The scope ofwhat evidence will be relevant depends on the nature of the assessment and of the errors alleged and how that might have affected theachievement of equity. However, in general terms, a taxpayer should be permitted to adduce evidence of the actual market value of thesubject property because it may demonstrate overvaluation or that equity has not been achieved (see Walmart 2018 at para 86). Taxpayersdo not typically have access to the market data available to SAMA or a municipality.

They are, therefore, handicapped in their ability toestablish error in, or to rebut the correctness of, a statistically-tested mass appraisal assessment. If taxpayers were prohibited fromadducing their own evidence of actual value, they would have no meaningful way to challenge tax assessments. The Legislature could nothave intended to grant taxpayers a meaningless right of appeal or to isolate tax assessment from meaningful review in this way.

Thishandicap is particularly apparent here because the Refinery stands apart from most industrial properties in Regina on a number ofmeasures. [62] I note also that, in a regulated property assessment appeal, there is no prohibition against using single property appraisaltechniques to vary an assessment. When it said otherwise in the Board Decision, the Board was addressing a non-regulated propertyassessment. Sections 210(1.1) and 226(3) of The Cities Act only bar boards of revision and the Committee, respectively, from using singleproperty appraisal techniques to vary non-regulated property assessments.

The maxim of statutory

interpretation known as expressio uniusest exclusion alterius (to express one thing is to exclude another) strongly supports the conclusion that this prohibition does not apply inregulated property assessment appeals. Axiomatically, evidence of this nature could be relevant in a regulated property assessment appeal. [63] That said, if admitted, evidence of actual market value or single property appraisal would only form part of the evidentiaryrecord in an assessment appeal, with weight or probative value left to be determined by the board of revision at first instance.

In Walmart2018, Whitmore J.A. made the following points: [86] While the Legislature has reinforced the primacy of the mass appraisal process (see paragraph 10 of Imperial Oil 2016), whetherequity has been achieved may require consideration of broader factors. Equity in non-regulated property assessment is a matter of result,not process (paragraph 9 of Imperial Oil 2016). Whether equity was achieved must be demonstrated on the evidence.

For example,evidence can be adduced as to whether the properties are similar (see Harvard Property Management Inc. v Saskatoon (City), 2017SKCA 34at para 22 [Harvard]), or as to the market value of these similar properties. I also note there is nothing in The Cities Act thatspecifically prohibits a taxpayer from adducing such evidence. [87] However, what evidence is relevant to the result is limited by the wording of s. 165(5) to value as of the applicable base date. The

inquiry as to whether equity has been achieved is limited to how the MVS was applied as of the base date of January 1, 2011, and data post-dating December 31, 2010, cannot be used. [88] Further, I agree with the respondent taxpayers’ position that it would be manifestly unfair to a property owner if it could only demonstrate inequitable overvaluation by putting forward a statistically-tested mass appraisal model.

Property owners generally do not have access to the necessary data, and prohibiting reliance on market evidence to appellant taxpayers has the potential effect of severely prejudicing their ability to meaningfully challenge their assessments. [89] This is not to say that an appellant will succeed by simply submitting evidence that its property value is less than what the assessment model provides, as mass appraisal will always provide assessments that will vary from actual value.

However, any such evidence may become part of the evidentiary basis to support a finding that equity has not been achieved by the property assessment. In short, while the Board, the Committee, and this Court are restricted from varying a non-regulated property assessment using a single property appraisal technique under The Cities Act , evidence (such as the rental rates submitted by the respondent taxpayers) may be considered along with the totality of the evidence to determine whether a model has assessed a group of similar properties equitably, so long as this evidence is relevant to the applicable base date.

The Committee made no error here. (Emphasis added) [ 64 ] In this case, the taxpayer led evidence from its appraiser intended to establish that the Refinery had been overvalued in the 2016 assessment when compared to its actual market value and to show that the parcels underpinning the assessment model were not comparable to the Refinery. The Board accepted the taxpayer’s appraiser as an expert in the area of the appraisal of real property. Moreover, the Board did not reject his evidence.

But, the Board remarked that the appraiser, unlike the Assessor, was not restricted by the rules of mass appraisal and had used old sales data that the Assessor had not been able to consider given the base date for the appraisal. [ 65 ] The Board also observed that the appraiser had not adjusted his sales data for time. It further noted that the appraiser’s focus had been on comparability “as it pertained to parcel size” only. The evidence did not explain how the larger parcels compared to the Refinery when adjusted for zoning, location and BLR.

These limitations on the appraiser’s expert evidence were confirmed by the Committee, who also noted that the parcels he had used differed from the Refinery with respect to zoning, primary land use, services and location (at para 26). [ 66 ] Accordingly, I am not persuaded that either the Board or the Committee ignored or failed to consider the appraiser’s evidence as to single-property appraisal and market conditions.

The Board and the Committee may have taken a critical view of it, thereby limiting its weight or probative value, but the Board expressly acknowledged that the evidence was helpful on the issues of comparability and reliability. Though the Committee did not engage in much analysis of the evidence, neither did it take issue with any of the Board’s findings or analysis of the evidence. [ 67 ] In short, evidence of market value under single property appraisal techniques is admissible in a regulated property assessment appeal.

However, neither the Board nor the Committee rejected, overlooked or ignored relevant evidence in this case. They simply found the taxpayer’s evidence unpersuasive and gave cogent reasons for so finding. I find no error of law in that regard. D. Reliability and application of the 105% LSM [ 68 ] The last question addresses two issues: (1) is the 105% LSM unreliable; and, if so, (2) should it have been applied?

These issues are the same in substance as those that were addressed in Imperial Oil 2016 , where this Court confirmed that the same 105% LSM was unreliable and had been applied to the assessment of the subject property contrary to assessment principles, but that equity with similar properties had, nonetheless, been achieved: [44] Rather, the question here is simply whether the 105% LSM curve established by the Assessor is reliable .

There is no statistical proof of its reliability before the Court, other than the Assessor’s straightforward confirmation that the ASR and COD were within the parameters of good assessment practice. That is, there was nothing before the Board that called into question the Court’s observation in Imperial Oil 2003 that a manifest disparity in size between the comparison group of properties relative to the subject property necessarily renders an LSM curve unreliable. As such, I must conclude that Imperial Oil 2003 remains applicable.

On that basis, I must also conclude that the manifestly disparate size of the 31 properties (28 of which were less than 2.2 acres) relative to the size of the Land (106.1 acres) necessarily renders the 105% LSM curve used in this case unreliable . … [48] Nonetheless, the Board did have the Assessor’s evidence that four of five LSM curves for other industrial neighbourhoods were also 105%, with the fifth being 125%.

And, there is also the prime directive of assessments set forth in s. 165(3) of The Cities Act : “The dominant and controlling factor in the assessment of property is equity.” This directive requires assessors to apply the market valuation standard so that non-regulated property assessments “bear a fair and just proportion to the market value of similar properties” (s. 165(5)).

The Board also had the City’s uncontradicted evidence that the Land had been assessed “equitably” with other large industrial parcels that fell within and outside Study Area 5203, including a refinery lot [i.e., the Refinery at issue in this appeal] and other tank farm lots ranging in size from 99.39 acres (4,329,428 square feet) to 550.23 acres (23,968,018 square feet).

This single bit of evidence is important because, under ss. 210(3) and 226(3.1), the Legislature has said that “an assessment shall not be varied [by the Board or the Committee, respectively] on appeal if equity has been achieved with similar properties”. [49] On the basis of the uncontradicted evidence that was before the Board and the requirements of The Cities Act , and notwithstanding the Assessor’s error in respect of the applicability of Imperial Oil 2003 , I conclude the Assessor achieved equity by applying the market valuation standard so that the 2013 assessment of the Land bears a fair and just proportion to the market value of similar properties as of the applicable base date.

Having confirmed that fact, I turn now to its implications. …

[53] In the result, in the circumstances of this case, because the Assessor achieved equity with similar properties, there was no roomfor the Board to set aside his assessment notwithstanding the Assessor’s failure to follow the reasoning in Imperial Oil 2003. That is, eventhough the Board correctly concluded the reasoning in Imperial Oil 2003 still applied and that the Assessor had failed to follow it, theBoard did not err in confirming the assessed value of the Land. Likewise, the Committee did not err in upholding the Board’s decision. 1.

The 105% LSM [69] The taxpayer and the City are addressing exactly the same SA5203 Dataset and exactly the same 105% LSM as this Court ruledwas unreliable in Imperial Oil 2016. I find nothing new in the evidence before the Board in this case, or in the submissions of the partiesat any level of the appeal process, that would justify the opposite conclusion. [70] The Assessor’s evidence is similar to that in Imperial Oil 2016. The Assessor testified that SA5203 is a comparableneighbourhood in terms of location, zoning, servicing and primary land use classification.

He submitted that urban and rural land aretreated differently for assessment purposes and that lot size is not as important as location or date of sale. As to reliability, he said he hadstatistically tested the 105% LSM and determined the ASR was 1.00 and the COD was 16.31%. He testified a COD of 16 was “actuallyquite good” (T0169). Conversely, the Assessor said using a 130% LSM would “under-assess and undershoot” and “undervalue” largerproperties. He spoke of previous assessment years’ LSMs of 105% and 110%, which were based on sales data that had included a 40-acreparcel.

The Assessor testified the 105% LSM is similar to LSMs in other industrial neighbourhoods in Regina, saying all but one of thoseneighbourhoods exhibited a 105% LSM, with the exception having a 125% LSM. [71] When countering the evidence of the taxpayer’s appraiser, the Assessor testified he had also calculated a 105% LSM based onsales of properties in the urban holding neighbourhood of Regina [Urban Holding] and in the agricultural zone of the Rural Municipalityof Sherwood [Agricultural Zone] .

However, in cross-examination, the Assessor acknowledged that, within Regina, only the UrbanHolding neighbourhood had sales of properties that were relatively comparable in size to the Refinery, with the largest beingapproximately 200 acres.

The Assessor also said that, in the City of Saskatoon, assessors routinely applied LSM curves of 110% and115% in industrial neighbourhoods and, in the City of North Battleford and the City of Prince Albert, assessors applied LSM curves of105% and 110%, respectively. [72] Notably, however, the City’s evidence does not address the issue of reliability that was identified by this Court in Imperial Oil2003, i.e., when “the disparity between the size in parcels used in the calculation by the assessor …and the subject land is so great that thecurve on any graph would, of necessity, be unreliable” (at para 7), which also underpinned the decision in Imperial Oil 2016.

Put anotherway, the City’s evidence does nothing to establish the reliability of the 105% LSM when it is extrapolated to apply to a property that is100 or more times larger than the average size of the parcels in the SA5203 Dataset that was used to calculate it. [73] The taxpayer’s root position in this appeal is straightforward: because the properties in the SA5203 Dataset are so vastlydissimilar to the Refinery in terms of lot size, the Assessor could not reasonably or reliably have used that dataset, or the 105% LSM, toestimate the market value of the Refinery.

The taxpayer’s latter assertion is the ratio of Imperial Oil 2003 and of Imperial Oil 2016.Although the taxpayer submits that the properties in the SA5203 Dataset are not comparable to the Refinery, I find its argument is not somuch an issue of comparability as it is of the reliability of the LSM (Imperial Oil 2016 at paras 42–43). [74] The Cost Guide says, and the Imperial Oil cases conclude, the 105% LSM is not reliable. Under the Cost Guide, the calculationof an LSM begins with a determination of the standard size parcel and the standard sale price per size unit in the applicable neighbourhood(s. 2.5).

From this, the Cost Guide directs the assessor to calculate the sale price per size unit “for all comparable land sales” in theneighbourhood. Following that, the assessor calculates the “comparable sale price to standard sale price ratio” for each land sale bydividing each sale price per size unit by the standard sale price per size unit. The Cost Guide directs the assessor to plot, on a graph, the“comparable sale price to standard sale price ratio” against the parcel size.

The LSM curve is then determined by establishing the graph’sbest fit line (under the formula set out above). [75] However, when a property is as large as the Refinery and there are no sales of property within any comparable size range, theextrapolation of the 105% LSM to the Refinery will, “of necessity”, be unreliable (Imperial Oil 2003 at para 7).

To produce a reliableLSM, the parcels making up the dataset must be said to be within “some degree of reasonable correlation” in size to the subject property(Imperial Oil 2003 at para 7). [76] The Refinery is orders of magnitude larger than the largest property in the SA5203 Dataset. While this does not necessarilymean that the property in the Dataset is non-comparable, it does mean that, due to size disparity, SA5203 did not have sufficient sales togenerate a reliable LSM. The effluxion of time between Imperial Oil 2016 and this appeal changes nothing because the same SA5203Dataset was used in both cases.

Accordingly, to answer the first question posed of the Court: The 105% LSM is unreliable whenextrapolated to apply to the Refinery (Imperial Oil 2003; Imperial Oil 2016). 2. Assessor “discretion” [77] Notwithstanding the Imperial Oil cases, the City says the issue of LSM reliability is within the Assessor’s discretion todetermine.

By this, the City means that the Assessor’s decision to use the 105% LSM was not subject to interference from the Board, theCommittee or this Court in an assessment appeal. [78] The City submits the taxpayer’s issue with the LSM is with comparability, which is a question of fact that it says falls withinassessor discretion (see Cadillac Fairview at para 36). It says the taxpayer is attempting to make lot size the most important characteristicwhen it comes to parcel comparability.

The City asserts the Assessor was simply exercising his discretion when he determined thatSA5203 is a comparable neighbourhood within the meaning of the Manual and the Cost Guide. In Cadillac Fairview, Sherstobitoff J.A.said this of assessor discretion in matters of comparability: [37] This sort of discretion was described in Laing at paras. [28] and [29] as the personal judgment of the valuator at work, and asbeing the backbone of local tax administration. Unless founded on material error of fact or law or of assessment principles and practice aslaid down in the manual, it should not be interfered with.

See also Husk v. City of Regina (1996), (SK CA), 141 Sask.

R. 74 (C.A.), at p. 77, and Estevan Coal. [79] In short, the City argues that the Assessor’s choices and conclusions in the 2016 assessment were immune from appellateintervention because they are discretionary decisions. [80] While the legislative regime, the Manual and the Cost Guide all afford assessors a measure of latitude in the assessment ofproperty, this Court has long cautioned that assessor discretion is not unlimited (TNC Mall Property Holdings Inc. v City of Moose Jaw,2020 SKCA 99 at paras 37-38 [TNC Mall]; Harvard Property Management Inc. v Saskatoon (City), 2017 SKCA 34 at para 28 [Harvard],citing 959630 Alberta Inc. v Regina (City), 2010 SKCA 136 at para 25, 362 Sask R 177 [959630 Alberta]; GMRI Canada Inc. v Saskatoon(City), 2009 SKCA 145 at paras 50–55, 343 Sask R 1 [GMRI Canada]; Sasco; Estevan Coal Corp. v Estevan (Rural Municipality No. 5),2000 SKCA 82, [2000] 8 WWR 474; Husk v City of Regina (1996), (SK CA), 141 Sask R 74 (CA) at 77 [Husk];Regina (City) v Laing Property Corp. (1994), (SK CA), 128 Sask R 29 (CA) [Laing]).

In Walmart 2018, WhitmoreJ.A. put assessor discretion and appellate review in these terms: [116] It is clear that an assessor’s discretion is an important and necessary aspect of the assessment process. Property assessment is acomplex undertaking that demands assessors make difficult decisions based on their specialized knowledge of the market and itsinfluences. Therefore, appellate bodies should begin their review of assessor’s decisions in relation to these sorts of matters from aposition of deference. That said, an assessor’s discretion is constrained by the requirements of the legislation.

If an assessment is not inaccordance with The Cities Act or is founded upon some other material error of fact or law or of assessment principle and practice, thenappellate bodies are no longer required to defer to the assessor. As indicated by this Court, the avoidance of the application of anenactment, which has the force of law, is an abuse of discretion (see Sasco at para 61). [81] In Laing, Cameron J.A. described it similarly (at 28-30): The nature of assessment would also suggest a rather traditional appellate role for the Committee.

Assessment of property for municipaltaxation purposes entails valuing the property in the light of the relevant circumstances, the requirements of the law, and the principles,formulas, and rules of appraisal contained in the Manual. Law and fact aside, the application of the body of appraisal principles andpractice found in the Manual entails, in turn, the exercise by the assessor of skill and judgment, even a measure of discretion.

What iscalled for in the exercise of that skill and judgment is the structured formulation of consistent opinions as to fair and equitable value forthe purposes of property taxation in the municipality. This is what the Manual suggests, saying that while the systematic application of theprinciples, rules, and formulas found in the manual is necessary to achieve the ends of tax equalization, its use “cannot replace thepersonal judgment of the valuator in his work.

He is the backbone of local tax administration.” Having regard for all of this, we are of the view the legislation envisions in the main an appeal to the Committee to review the decision ofa board of revision for error, as alleged by the appellant, and if error be found, to do what the board of revision in the exercise of itspowers of correction and variation should have done, remembering that at bottom lies the personal judgment of the assessor. Unless thatjudgment be founded on material error of fact, of law, or of assessment principles and practice as laid down in the Manual, it should not beinterfered with.

And even then, if the value ascribed to an improvement by an assessor should appear for whatever reason to be more orless than its fair value, the assessed value should not be varied so long as it bears a fair and just proportion to the assessed value of otherimprovements in the municipality. Without necessarily suggesting the mandate of the Committee does not extend beyond this, this is its primary mandate. As a generalmatter, it is for the assessors to make the evaluations, not the Committee.

And in the absence of error as alleged by the appellant, or in thepresence of error of the kind against which relief is foreclosed by

section 256, one would think the valuation and assessment should be leftto stand. Were it otherwise—were the Committee to freely and without restraint substitute its views for those of the assessor or to performthe assessment anew—the efficiency and timeliness of the assessment and taxation scheme would break down. In short, the statutesenvision appeals against erroneous valuations and assessments, not applications for revaluation and reassessment. [82] As this suggests, no discretion is completely unfettered or unlimited.

The exercise of discretion denotes decision-making inaccordance with or under a set of principles. While decision-makers may have the authority to make the decision they think is fit in thecircumstances, they are bound to take into account all of the principles and criteria that bear upon the decision in the circumstances athand. At the most basic level, assessors are bound to exercise their discretion in a way that achieves equity in municipal tax assessment, asdefined by the applicable municipal assessment statute (Estevan Coal at para 21).

In terms of other limitations, the measure of latitudeafforded an assessor’s decision will be narrower where the statute, the Manual, the Cost Guide or another guideline prescribes the criteriathe assessor must take into account in the assessment process. Assessors are bound to follow these mandatory criteria (Estevan Coal atpara 22; Sasco at para 17; Laing at para 73).

Assessors must also have proper regard for relevant decisions of this Court, the Committeeand boards of revision (e.g., The Cities Act, s. 270(2); South Hill Mall Property Holdings Inc. v Prince Albert (City), 2017 SKCA 52). [83] However, “not everything contained in the Manual constitutes ‘formula, rule, or principle’” nor is it all cast in mandatory terms(Husk at 77). Where the Manual and other guidelines adopted by SAMA are “little more than a set of suggestions for the general use ofassessors”, the assessor is afforded a “measure of latitude” in the assessment process (Husk at 77).

Put another way, where the applicationof the appraisal principles and practice found in the Manual and other guidelines adopted by SAMA calls for the exercise of assessor skilland judgment based on the assessor’s knowledge and experience, the resulting decision is owed a healthy measure of deference by theboard of revision, the Committee and this Court such that it would not normally be subject to appellate interference.

However, the measureof latitude granted to assessors in this regard is also not without its limits: What is called for in the exercise of that skill and judgment is the structured formulation of consistent opinions as to fair and equitablevalue for the purposes of property taxation in the municipality. (Laing, at para 28) [84] Taking all of this into account in TNC Mall, Richards C.J.S. described the exercise of assessor discretion in a context similar tothat at issue in this appeal in this way:

[43] In reaching this conclusion [that the Committee had not misapprehended the meaning of comparability ], I do not, in any way, resile from what the Court said in Harvard . In developing a capitalization rate, an assessor must begin by selecting the properties to be considered in the analysis and the selection process must be conducted with resort to factors properly bearing on comparability. Only when a group of comparable properties has been identified does statistical analysis come into play to determine the quality of the stratifications in issue.

An assessor may not ignore the question of comparability by simply pointing to the results of statistical analyses. But, all of that said, the work of an assessor is conditioned by the factual realities of the assessment problem in issue. If there are no directly comparable properties, then there are no directly comparable properties. In that situation, the assessor will of necessity have to move forward using less comparable properties and in a way that respects the requirements of the Act to the extent reasonably possible. (Emphasis added) 3.

Assessor discretion in this appeal [ 85 ] In this appeal, Imperial Oil 2003 stands as a ruling by this Court that an LSM used in circumstances analogous to the matter at hand is “of necessity” unreliable. In giving meaning to the word reliable in the Cost Guide , the Court in Imperial Oil 2003 said parcels used to calculate an LSM must have “some degree of reasonable correlation for the dimension being measured, that is here, size” (at para 7).

As Imperial Oil 2003 is a decision of this Court, it is the law and, where it is relevant to an assessment, it constrains the exercise of assessor discretion. [ 86 ] The ruling in Imperial Oil 2003 is relevant to the exercises of assessor discretion at issue in this appeal. The parcels used to calculate the 105% LSM do not have “reasonable correlation” to the Refinery in terms of size. The properties in the SA5203 Dataset have a median parcel size of 1.24 acres and an average parcel size of 1.99 acres. The Refinery parcel size exceeds 550 acres.

To be entirely clear about this, Imperial Oil 2003 is relevant because the issue of reliability in Imperial Oil 2003 and in this case are identical. The size disparity renders the LSM unreliable. [ 87 ] The City adduced no evidence to establish that the logarithmic LSM curve plotted by the Assessor from the SA5203 Dataset had reliably adjusted the BLR when applied to parcels much greater in size than those included the Dataset. I am not persuaded the ASR and COD assist in this regard because they are based on the same data that generated the LSM curve. Moreover, there was no evidence the Assessor understood, in

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