Chelsea (Municipality) v. Canada (Attorney General)

Chelsea (Municipality) v. Canada (Attorney General)
Court (s) Database
Federal Court Decisions
Date
2023-01-23
Neutral citation
2023 FC 103
File numbers
T-1909-21
Notes
A correction was made on February 19, 2024
Decision Content
Date: 20230123
Docket: T-1909-21
Citation: 2023 FC 103
[ENGLISH TRANSLATION]
Ottawa, Ontario, January 23, 2023
PRESENT: The Honourable Mr. Justice Pamel
BETWEEN:
MUNICIPALITY OF CHELSEA
Applicant
and
ATTORNEY GENERAL OF CANADA
Respondent
and
NATIONAL CAPITAL COMMISSION
Tribunal in respect of which the application is made
JUDGMENT AND REASONS
I. Overview
[1] The Municipality of Chelsea [Municipality] is seeking judicial review of a decision of the chief executive officer of the National Capital Commission [Commission] dated November 19, 2021, in which the Commission determined, pursuant to the Payments in Lieu of Taxes Act, RSC 1985, c M-13 [PILT Act], and the Crown Corporation Payments Regulations, SOR/81-1030 [Regulations], the total amount payable as payments in lieu of taxes [PILTs] to the Municipality for the 2018–20 triennial roll in respect of some thirty federal properties within Gatineau Park [Park] that are located within its territory [federal properties].
[2] In the context of the dispute between the parties regarding the calculation of the PILTs and in response to the Commission’s opinion in this regard, the Municipality sought the intervention of the advisory panel [Panel], which gave a majority opinion in favour of the Municipality’s position, including in respect of the value of the requested amounts. The Commission’s final decision reflected some of the Panel’s recommendations and disregarded others, in addition to relying on analyses conducted after the opinion was provided to the parties. Overall, the Commission determined that the amounts to be paid as PILTs represented approximately 50% of the amounts requested by the Municipality.
[3] The Municipality contends that, through its conduct, the Commission breached the legitimate expectations it had created, namely, that it undertook to make a decision in accordance with the Panel’s recommendations. It also submits that the Commission’s decision is unreasonable, as it runs counter to the objective of the statutory regime governing the payment of PILTs, disregards the Panel’s insights on the principles that apply to the assessment of federal properties, and is based on factors that were not disputed before the Panel.
[4] For the following reasons, the Municipality did not satisfy me that the Commission breached its duty of procedural fairness or that its decision was unreasonable. Consequently, this application for judicial review is dismissed in its entirety.
II. Legislative framework
[5] I have provided the statutory and regulatory provisions relevant to this application in the appendix to my decision.
[6] The statutory framework for PILTs has been clearly defined by the jurisprudence of the federal courts and the Supreme Court. For the purposes of this application, it is helpful to recall the essential elements while taking into account the statutory scheme governing the Commission, as contained in its home statute, the National Capital Act, RSC 1985, c N-4 [NCA], which also provides for the payment of grants to municipalities to compensate them for the loss of tax.
[7] Under section 125 of the Constitution Act, 1867, 30 & 31 Vict, c 3 (UK), reprinted in RSC 1985, Appendix II, No 5, the federal Crown is exempt from provincial and municipal taxation. However, aware that Crown properties form part of the territorial fabric of the provinces and municipalities and recognizing the importance of services provided to these properties by municipalities, the federal legislator put in place a compensation system governed by the PILT Act and its regulations (Montréal (City) v Montreal Port Authority, 2010 SCC 14 at paras 13–14 [Montreal Port Authority]).
[8] The PILT Act applies to federal property owned by His Majesty in right of Canada that is under the administration of a minister of the Crown or a corporation included in Schedules III or IV to this act (s. 2). Section 2.1 of the PILT Act states that its purpose is “to provide for the fair and equitable administration of payments in lieu of taxes.” As a reference factor, the PILT Act uses the “real property tax” established by a “taxing authority” (s. 2).
[9] The Minister may, on application from a taxing authority, make a payment in lieu of a real property tax for a taxation year in respect of any federal property on its territory (s. 3). As a Crown corporation listed in Schedule III to the PILT Act, the Commission must make PILTs in the manner prescribed in the Regulations. Subsection 7(1) of the Regulations provides that the PILTs paid by a Crown corporation shall not be less than the product of the effective rate and the property value of the property. It should be noted that in this case, the only thing opposing the parties is the determination of the property value of the federal properties. This is the value that a Crown corporation would consider to be attributable by an assessment authority to its Crown corporation property as the basis for computing the amount of any real property tax that would be applicable to that property if it were taxable property.
[10] To this end, the principles guiding the assessment of properties in Quebec are contained in the Act respecting Municipal Taxation, CQLR c F-2.1 [AMT], and its regulations. This assessment must take into account not only the condition of the unit of assessment, the property market conditions and the most likely use made of the unit (section 46), but also the incidence that the realization of the benefits or losses that the unit of assessment may bring, considered objectively, may have on its most likely sale price (s. 45).
[11] Moreover, even before the Regulations were enacted, Parliament, in section 16 of the NCA, conferred on the Commission a compensation authority similar to that provided by the PILT Act. Subsection 16(1) of the NCA provides that the Commission may pay grants to a local municipality not exceeding the taxes that might be levied by the municipality in respect of any real property of the Commission if the Commission were not an agent of His Majesty. Although subsection 16(2) excludes parks from this category, Gatineau Park is reintroduced to it by virtue of subsection 16(3), which provides that the Commission may pay grants to the competent authorities in respect of real property of the Commission situated in Gatineau Park not exceeding in any tax year the amounts estimated by the Commission to be sufficient to compensate such authorities for the loss of tax revenue incurred during that tax year in respect of municipal and school taxes by reason of the acquisition of the property by the Commission. In this case, central to the dispute between the parties as to the appropriate method for computing the property value of the federal properties is the question of taking into account the objective constraints arising from the Commission’s acquisition of these properties in order to dedicate them to conservation.
[12] That said, it should be noted that, notwithstanding any other Act of Parliament or its regulations, the Commission, as a corporation listed in Schedule III to the PILT Act, shall comply with the Regulations for any payment made in lieu of real property tax (subs. 11(1) of the PILT Act). In other words, it is the Regulations, adopted pursuant to paragraph 9(1)(f) of the PILT Act, that determine the method of computing these payments, notwithstanding any other statutory provisions, including section 16 of the NCA.
[13] However, as in this case, disagreements sometimes arise between taxing authorities and Crown corporations as to how to perform the computations leading to the determination of PILTs. For this reason, the PILT Act provides for the appointment of an advisory panel that shall give advice to the Crown corporation on the property value of any federal property, following a process of consultation with the parties (s 11.1 of the PILT Act; s 12.1 of the Regulations). As the Panel was asked for advice in this case, it will be necessary to assess the incidence of the Panel’s opinion on the reasonableness of the Commission’s decision.
III. Background
[14] Following the deposit of the 2018–20 triennial roll by the Municipalité régionale de comté des Collines-de-l’Outaouais [regional county municipality of the Collines-de-l’Outaouais] [MRC], the Municipality filed applications for PILTs with the Commission in respect of federal properties situated within the Municipality’s territory. These applications were based on increases in value in roll ranging from 19% to 25% for these properties. By comparison, the average increase for any immovable type in the municipality of Chelsea was 3.9%.
[15] In response to these seemingly targeted, significant increases, a Commission assessment officer submitted requests for justification to the MRC in November 2017. In response, the MRC sent the Commission a table of [translation] “comparable” sales in March 2018. The parcels of land that were sold were generally smaller than the ones under consideration, and their zoning allowed for residential development. They were situated in developed areas of the Municipality and had mostly been sold by real estate developers.
[16] Subsequently, there were various exchanges and meetings between the Commission, the MRC and the Municipality. In March and June 2018, the Commission made PILTs to the Municipality for its properties on the basis of its own calculations. In an effort to reach an agreement, discussions between the parties continued between September and December 2018, to no avail.
[17] On September 24, 2019, through its lawyers, the Municipality sent the Panel a request for advice on the federal properties for the purposes of the 2018–20 triennial roll. There were two types of property: large parcels of land and smaller parcels of land in residential pockets along Kingsmere and Meech lakes, within which residential construction is permitted. For the purposes of this application, consideration should be given to the parties’ submissions to the Panel on the possibility of the Commission aggregating the units of assessment entered separately on the MRC’s roll for the purpose of computing the property value of the federal properties, as well as the method for computing the property values of large parcels of land. Since the Municipality has asserted before the Court that the Commission should have followed the Panel’s advice in all respects, it follows that the Municipality is contesting only those aspects of the decision that deviate from the advice. As a result, since the Commission accepted the Panel’s recommendations regarding the property value of the small parcels of land that it decided not to aggregate with the adjacent large parcels of land, these values and how they were computed are not the subject of any disagreement between the parties.
[18] At the hearing before the Panel, which was held from November 16 to 20, 2020, the Commission heard from Neil Gold, a chartered appraiser and senior director at Altus Group Ltd. Mr. Gold suggested that the Panel aggregate all units of assessment corresponding to the federal properties into one unit. He also proposed an assessment of the federal properties based on highest and best use [H&BU], that is, a natural space dedicated to conservation and recreation, and taking into account their large area. For its part, the Municipality heard from Marc Lépine, a chartered appraiser at LBP Évaluateur, which is also a signatory of the MRC’s assessment roll. Mr. Lépine essentially defended a property-value analysis based on the behaviour of local real estate market participants and was opposed to aggregating the units of assessments as proposed by Mr. Gold.
[19] On February 16, 2021, the Panel delivered its advice. In respect of the issue of the aggregation desired by the Commission, the Panel concluded that the large parcels of land and some small parcels of land could be aggregated as this met the conditions set out in section 34 of the AMT. However, it did not recommend doing so because of the impact that such an aggregation would have on immovable categories and therefore the effective rate applicable to the properties.
[20] As to how to compute the property value, the majority of the Panel adopted the Municipality’s approach. The Panel was of the view that, despite the lack of sales of institutional land reported by the Municipality’s appraiser, the comparison with the local market was more credible than the approach suggested by the Commission’s expert. For example, the sales compiled by Mr. Lépine of large parcels of land, albeit smaller than the federal properties and used for different purposes, were more likely to show what the Commission would have to pay if it were both the purchaser and the seller of these properties, in accordance with section 44 of the AMT. The Panel also analyzed section 16 of the NCA and concluded that in order to determine the loss in municipal and school taxes resulting from the Commission’s acquisition of the properties, the Panel had to consider alternative uses and observe the local market’s behaviour. The Panel therefore assessed a total property value of $106,372,900 for the large parcels of land whose value on the roll was $115,406,500.
[21] Upon receipt of the opinion, the Commission noted the importance the Panel attached to the location of comparable sales and the Panel’s findings preferring Mr. Lépine’s comparables but rejecting those of its own expert. But the Commission found that the Panel was wrong in not considering the H&BU and the surface area of the parcels of land as relevant factors in determining the property value of the federal properties. The Commission therefore carried out additional analyses to obtain measurements in order to be able to adjust the values identified by the Municipality’s expert, taking into account location, H&BU and area.
[22] The Commission also recognized that a single unit of assessment created by aggregating all the parcels of land would be so large that it would become very difficult to find truly comparable transactions in terms of use, surface area and location in order be able to establish the value of that unit. Therefore, the Commission did not adopt its initial approach to aggregate the large parcels of land. However, it was of the view that seven small parcels of land met all the conditions applicable in order to be aggregated with neighbouring large parcels of land, in accordance with section 34 of the AMT.
[23] On September 28, 2021, in light of these considerations, the Commission sent the Municipality the contents of its additional analyses and the new values resulting from its calculations, asking it to provide comments before the Commission finalized its recommendation to the Chief Executive Officer.
[24] On October 7, the Municipality formally demanded that the Commission make a final decision in accordance with the findings in the Panel’s advice, stating that it considered the new factors submitted by the Commission to be inadmissible, in part because they had not been submitted to the Panel. The Municipality was also of the view that the Commission had previously undertaken to make a decision on the basis of the Panel’s recommendations. In its letter of reply dated October 15, 2021, the Commission informed the Municipality that it considered the advice to be a recommendation to which new factors could be added and again asked the Municipality to comment on or to respond to them, and to provide any other item deemed relevant. The Municipality reiterated its objection to the Commission’s new approaches and insisted that the Commission issue a decision within 10 days, which it did on November 19, 2021.
[25] The Commission’s decision identifies the amounts to be paid to the Municipality as PILTs for the aggregated large and small parcels of land, namely, $358,119.81 for 2018; $370,632.02 for 2019; and $383,240.85 for 2020, calculated on the basis of a property value of $48,309,700 for these parcels of land. The decision recognizes the importance of seriously considering the Panel’s recommendations but notes that the Commission is not bound by them as its role is to make a decision it considers to be consistent with all the facts before it and with the applicable principles. In this regard, the decision states that the Commission considered not only the Panel’s opinion and the positions of the Municipality and the Commission’s PILT team but also the land assessment principles applicable in Quebec in order to determine the property value of the federal properties.
IV. Issues
[26] The issues raised by this application, worded similarly by the parties, can be summarized as follows:
Did the Commission, through its conduct, undertake to follow the recommendations made by the Panel in its opinion of February 16, 2021?
Is the Commission’s decision reasonable?
If the Commission’s decision is unreasonable, what are the appropriate remedies?
Does the Commission’s conduct justify reimbursement of the extrajudicial fees incurred by the Municipality?
V. Standard of review
[27] The first issue raised by the Municipality engages the doctrine of legitimate expectations, which has been recognized by the Supreme Court as an extension of the rules of natural justice and procedural fairness (Mount Sinai Hospital Center v Quebec (Minister of Health and Social Services), 2001 SCC 41 at para 32 [Mount Sinai]; Old St. Boniface Residents Assn. Inc. v Winnipeg (City), [1990] 3 SCR 1170 at 1204). On this issue, the Court must ask “whether the procedure was fair having regard to all of the circumstances” and the ultimate question is “whether the applicant knew the case to meet and had a full and fair chance to respond” (Canadian Pacific Railway Company v Canada (Attorney General), 2018 FCA 69 at paras 54, 56; Fortier v Canada (Attorney General), 2022 FC 374 at para 15 [Fortier]).
[28] Furthermore, it is not disputed that the standard of review applicable to the Commission’s decision is reasonableness (Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 at paras 16–17 [Vavilov]). The role of the Court is to determine whether the decision bears the hallmarks of reasonableness—justification, transparency and intelligibility—and whether it falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law (Vavilov at paras 85, 99). The latter aspect of the analysis is all the more central in this case. The Commission’s decision is far from being the result of a binary choice and, on the contrary, requires the assessment of many complex factors, which increases the possibilities for both the decision-making process used and the final outcome. The Court must therefore examine the Commission’s reasons with respectful attention and seek to understand the reasoning process it followed to arrive at its conclusions in order to decide whether the decision as a whole is one that is based on an internally coherent and rational chain of analysis (Vavilov at paras 84–85).
VI. Analysis
A. Did the Commission, through its conduct, undertake to follow the recommendations made by the Panel in its opinion of February 16, 2021?
[29] The Municipality contends that the Commission, through its conduct, undertook to follow the Panel’s recommendations. It identifies three factors that it believes created legitimate expectations on its part to this effect, namely, that the Commission asked it to address the Panel, insisted that three members sit on the Panel, and made a commitment to the public to follow the Panel’s insights.
[30] The Municipality claims that it filed a first application with the Panel on September 13, 2018, and a second application on September 24, 2019, on the basis of information given to it by the Commission regarding the possibility for a taxing authority that is unsatisfied with the PILT amount paid to submit an application for review to the advisory panel. The Municipality also alleges that the Commission’s representatives told it that they hoped to reach a consensus through this process and to implement a sustainable approach for the years to come. They also apparently reassured the Municipality’s representatives on several occasions, asking them to trust the statutory process to resolve their dispute and affirming that it was a [translation] “good process.” Given the lengthiness of this process and the significant costs involved, the Municipality expected the Commission to follow the recommendations.
[31] The Municipality further submits that the Commission insisted that three expert members sit on the Panel at the hearing. According to the Municipality, this request demonstrates the importance that the Commission attached to the process before the Panel when its claims had not yet been rejected, and its willingness to seek the insights of three pan-Canadian experts in order to make a decision in line with the applicable legal principles.
[32] Finally, the Municipality refers to two letters dated January 8, 2019, sent by the Commission’s CEO to residents concerned about the impact of the future PILT decisions on the Municipality’s taxpayers. The first one, written in English, stated that “the [Commission] will respect the established process of the Payment in-Lieu of Taxes Dispute Advisory Panel and will follow the conclusions that will ensue”, while the second one, written in French, stated that [translation] “the [Commission] will respect the process of the Payments in Lieu of Taxes Dispute Advisory Panel and will take its findings into account” [emphasis added]. The Municipality submits that these statements by the Commission demonstrate that it agreed to consider the Panel’s findings and to apply them. The Municipality contends that the combination of these factors justifies the application of the doctrine of legitimate expectations, which compels the Commission to make a decision in accordance with the Panel’s advice.
[33] In my view, the arguments put forward by the Municipality are unlikely to permit the application of the doctrine of legitimate expectations. First, it should be reiterated that the doctrine of legitimate expectations is only one component of procedural fairness because it is one of the five contextual, non-exhaustive factors established by the Supreme Court in Baker to define the procedural rights required by the duty of fairness in given circumstances (Baker v Canada (Minister of Citizenship and Immigration), [1997] 2 SCR 817 at paras 22–28). Thus, it is not sufficient for the Municipality to demonstrate that the Commission did not satisfy the expectations it created; instead, it must be able to prove that this resulted in the Commission’s breaching its duty to act fairly (GCT Canada Limited Partnership v Vancouver Fraser Port Authority, 2022 FC 1109 at para 248).
[34] That said, in Canada (Attorney General) v Mavi, 2011 SCC 30 [Mavi], the Supreme Court presented the doctrine of legitimate expectations as follows:
[68] Where a government official makes representations within the scope of his or her authority to an individual about an administrative process that the government will follow, and the representations said to give rise to the legitimate expectations are clear, unambiguous and unqualified, the government may be held to its word, provided the representations are procedural in nature and do not conflict with the decision maker’s statutory duty. ... It will be a breach of the duty of fairness for the decision maker to fail in a substantial way to live up to its undertaking: Brown and Evans, p. 7-25 and 7-26.
[35] In Agraira v Canada (Public Safety and Emergency Preparedness), 2013 SCC 36 [Agraira], the Supreme Court raised the possibility that a legitimate expectation is not created by a procedural commitment but by a commitment as to the substantive outcome:
[94] . . . Likewise, if representations with respect to a substantive result have been made to an individual, the duty owed to him by the public authority in terms of the procedures it must follow before making a contrary decision will be more onerous.
[95] The specific conditions which must be satisfied in order for the doctrine of legitimate expectations to apply are summarized succinctly in a leading authority entitled Judicial Review of Administrative Action in Canada:
The distinguishing characteristic of a legitimate expectation is that it arises from some conduct of the decision-maker, or some other relevant actor. Thus, a legitimate expectation may result from an official practice or assurance that certain procedures will be followed as part of the decision-making process, or that a positive decision can be anticipated. As well, the existence of administrative rules of procedure, or a procedure on which the agency had voluntarily embarked in a particular instance, may give rise to a legitimate expectation that such procedures will be followed. Of course, the practice or conduct said to give rise to the reasonable expectation must be clear, unambiguous and unqualified.
[Emphasis added]
[36] This is what the Municipality is alleges here: The Commission’s decision should have been in line with the Panel’s opinion, as it had committed to. However, there is nothing in the evidence on the record to suggest that the Commission made such a commitment. Rather, it appears that the Commission considered the appropriateness of engaging in the process set out in section 11.1 of the PILT Act, given the disagreement between the parties, and expressed its confidence in reaching a consensus in this way. I also note that the letters referred to by the Municipality are addressed to two citizens and not to the Municipality itself. In addition, the letters express a different commitment depending on the language used, one indicating that the Commission would apply the Panel’s conclusions and the other that it would take them into account. In the absence of any specific explanation as to their impact on the expectations, not of the Municipality’s residents but of the Municipality itself, I am not satisfied that these letters are clear, unambiguous and unqualified conduct on the part of the Commission justifying an expectation of the kind that is alleged by the Municipality. Similarly, I find that the Municipality has not demonstrated how the Commission’s desire to form a three-member rather than a one-member panel could be interpreted as contributing to the clear expression of a commitment on its part to make a decision that is in line with the Panel’s findings.
[37] Furthermore, I find that the Commission’s request to the Municipality to refer the matter to the Panel, as well as its comments asking it to trust the consultative process, cannot reasonably be interpreted as an expression of the Commission’s waiving its discretion in favour of blindly adopting the Panel’s recommendations. Since the authority under the PILT Act, the Regulations and the NCA in respect of the computation of PILTs is unequivocally conferred on the Commission alone, I am of the view that such a waiver would be tantamount to unduly fettering the exercise of the Commission’s discretion. In any event, and even assuming that this was the Commission’s original intention, the case law clearly indicates that a public authority cannot be held to its word if its representations conflict with its statutory duty (Mavi at para 68; Mount Sinai at para 29). In this regard, the Municipality did not provide any explanations as to how the Commission could reasonably implement the alleged waiver without thereby coming into conflict with its statutory remit.
[38] Moreover, the remedy sought by the Municipality is, in my view, incompatible with the remedies provided for by the doctrine of legitimate expectations. As the Supreme Court pointed out, an important limit on the doctrine of legitimate expectations is that it cannot give rise to substantive rights, that is, the Court may only grant appropriate procedural remedies to respond to the legitimate expectation (Agraira at para 97). In an administrative proceeding, a legitimate expectation can thus give rise to a right to make representations, a right to be consulted or perhaps, if circumstances require, more extensive procedural rights, but it does not otherwise fetter the discretion of a statutory decision-maker in order to mandate any particular result (Moreau-Bérubé v New Brunswick (Judicial Council), 2002 SCC 11 at para 78). However, by requiring that the Commission’s decision be consistent with the Panel’s advice, the Municipality’s expectations necessarily relate to the finality of the decision and mandate a specific result, to which the Commission cannot be legitimately constrained by the application of the doctrine of legitimate expectations.
[39] But there is more. In its correspondence dated September 28 and October 15, 2021, the Commission clearly stated its position on the non-binding nature of the Panel’s advice and its intention to continue its analysis, in addition to asking the Municipality to comment on the results and present its arguments. However, the evidence shows that the Municipality chose not to respond to the Commission’s invitations and instead reiterated its opposition to the new approaches taken by the Commission and insisted that it make its decision quickly.
[40] I can understand that the Municipality, as it stated in its memorandum, considered the process before the Panel to be lengthy and costly and was therefore reluctant to continue with the steps involved in resolving its dispute with the Commission. But the remedy provided by the doctrine of legitimate expectations is precisely the possibility of continuing the administrative process in the event that the decision-maker changes course. It appears that, in addition to seeking conclusions that are incompatible with the doctrine of legitimate expectations, the Municipality, at the time when it was reasonable to conclude that its expectations would not be satisfied, knowingly refused to exercise its right to make additional representations, which is precisely the remedy provided by the doctrine it is now relying on in support of its claims.
[41] Consequently, I conclude, first, that the Commission’s conduct could not give rise to legitimate expectations on the part of the Municipality and second, that the Commission fulfilled its duty of procedural fairness.
B. Is the Commission’s decision reasonable?
(1) The extent of the Commission’s discretion when a dispute is brought before the advisory panel and the panel gives its opinion
[42] The first issue raised by the Municipality regarding the reasonableness of the decision concerns the extent of the Commission’s discretion. Specifically, the Municipality submits that the Panel’s opinion substantially limited the range of reasonable outcomes of the exercise of the Commission’s discretion. In support of its claims, the Municipality cites Trois-Rivières (City) v Trois-Rivières Port Authority, 2015 FC 106 [Trois-Rivières], in which Mr. Justice Locke (now with the Federal Court of Appeal) states:
[68] In my view, the opinion of the Advisory Panel is a relevant factor that would limit the range of possible, reasonable outcomes, but it is not the role of the Minister or a Crown corporation to bring a dispute to the Advisory Panel. . . . This approach deprives the parties of the Advisory Panel’s opinion, which, while not binding, would certainly have been subsequently considered by the TPA and, if still necessary, in this application for judicial review.
[43] The Municipality also refers to the Payments in Lieu of Taxes Dispute Advisory Panel: Rules of Practice [Rules of Practice], which govern not only the filing of applications for review and the pre-hearing process, but also the rules for the conduct of the hearing and evidence. The Municipality submits that the Panel, in accordance with the Rules of Practice, held an adversarial five-day hearing including cross-examinations, where both parties presented a great deal of evidence through expert reports, lay witnesses and assessment experts. The Municipality therefore contends that the process before the Panel was comprehensive, complete and comparable to a tribunal hearing, seeing it as bearing all the features of a quasi-judicial process.
[44] In addition, the Municipality states that the Panel, made up of three independent expert members, gave a unanimous, reasoned opinion on the evidence and property assessment principles. It contends that the Commission, unlike the Panel, does not have property assessment expertise, citing the objects and purposes of the Commission in section 10 of the NCA:
Objects and purposes of Commission
Mission de la Commission
10(1) The objects and purposes of the Commission are to prepare plans for and assist in the development, conservation and
improvement of the National Capital Region in order that the nature and character of the seat of the Government of Canada may be in accordance with its national significance.
10(1) La Commission a pour mission d’établir des plans d’aménagement, de conservation et d’embellissement de la région de la capitale nationale et de concourir à la réalisation de ces trois buts, afin de doter le siège du gouvernement du Canada d’un cachet et d’un caractère dignes de son importance nationale.
[45] Relying on Catalyst Paper Corp. v North Cowichan (District), 2012 SCC 2 at paragraph 18, the Municipality alleges that the Panel’s expertise on the matters submitted, which is provided for in the statutory framework of the PILT Act, combined with the Commission’s lack of specialized expertise, provides the Court with greater authority to intervene in the judicial review of the decision. The Municipality submits that although, since Vavilov, the administrative authority’s expertise has not been taken into account in determining the applicable standard of review, it must nevertheless be taken into account in conducting the judicial review of the decision (Vavilov at para 31).
[46] In addition, the Municipality submits that it is clear that the Commission asked the Municipality to turn to the Panel for insights into property value and, in so doing, relied on the Panel to resolve the dispute between them. The Municipality contends that in receiving the Panel’s opinion on such specialized and specific tax issues, the scope of the Commission’s discretion was significantly reduced, and that, by departing markedly from the insights in the Panel’s opinion, the Commission necessarily made an arbitrary, unreasonable decision that was not within the range of possible outcomes.
[47] I am of the view that the Municipality’s arguments cannot be accepted.
[48] First, it is worth reiterating the principles underlying a Crown corporation’s discretion in respect of PILTs, namely, the preservation of the Crown’s immunity to taxation, the need for flexibility nationwide, practicality in terms of potential disagreements, difficulty of choice of rate or property value; and protection of federal interests (Toronto (City) v Toronto Port Authority, 2010 FC 687 at para 44 [Toronto]).
[49] Furthermore, I note that while the question of the extent of the discretion has already been analysed from the perspective of a Crown corporation’s taking into account the assessments made by taxing or assessment authorities (Trois-Rivières at para 65; Halifax (Regional Municipality) v Canada (Public Works and Government Services), 2012 SCC 29 at paras 38–42 [Halifax]; Toronto at para 57; Montreal Port Authority at para 31), it is being debated for the first time here in terms of the effect of an advisory panel’s opinion. In Toronto and Halifax, where such an opinion had been given, both the Toronto Port Authority and the Minister had more or less adopted the opinion in its entirety, so the issue that is before us did not arise there.
[50] In addition, I agree with the Municipality that the administrative decision-maker’s expertise, although, since Vavilov, no longer relevant in determining the applicable standard of review, continues to be relevant in assessing whether the decision-maker exercised its discretion reasonably.
[51] That said, the Municipality’s claims that section 10 of the NCA demonstrates that the Commission does not have any property assessment expertise cannot defeat the evidence in the record to the contrary. This evidence reveals that the Commission has a team specifically responsible for computing PILTs, which includes chartered appraisers whose job it is to assess the fair value of all federal heritage properties managed by the Commission and to make recommendations on this subject to its chief executive officer. As part of the dispute that led the parties before the Panel, the Commission also engaged the services of an independent firm of experts, the Altus Group, and heard from Mr. Gold, a chartered appraiser with over 40 years of experience as an expert witness before the courts. While the Municipality points out that a significant portion of Mr. Gold’s arguments were rejected by the Panel, I agree with the Commission that this outcome does not cast doubt on his qualifications as an expert or deprive him of his skills and experience. Thus, I consider the Municipality’s argument that the Commission has no specialized expertise to be unfounded.
[52] Furthermore, in the legislation relevant to this application, I do not see the legal basis on which the Municipality is relying to support its claims regarding the quasi-judicial nature of the Panel. Section 11.1 of the PILT Act and section 12.1 of the Regulations, which provide for the creation of the Advisory Panel, simply state that its members must have relevant knowledge or experience and that their mandate is to give advice to Crown corporations in respect of the making of PILTs. Although the Municipality refers to the Rules of Practice to describe the seriousness of the process before the Panel, there is nothing in the applicable legislation to suggest that a panel that the PILT Act characterizes as an advisory panel and whose role is to render opinions is quasi-judicial in nature.
[53] Similarly, the Municipality’s arguments regarding the binding nature of the Panel’s opinion on the Commission’s decision are not supported in either the statutory system governing the making of PILTs or the case law cited by the Municipality itself. Indeed, property value, the determination of which is central to this dispute, is defined by the Regulations as the value that a corporation would consider to be attributable by an assessment authority to its corporation property if the property under review were taxable. On the face of this provision and the decisions that have analyzed it, there is no doubt that the Commission has the final word on this matter (Montreal Port Authority at para 22; Halifax at para 40).
[54] Furthermore, in Trois-Rivières, Locke J. (now with the Federal Court of Appeal) made it clear that the advisory panel’s opinion is a relevant factor that would limit the range of possible, reasonable outcomes, but that the Panel’s opinion is not binding (Trois-Rivières at para 68). I also note the obvious parallel between this principle and the one established by the Supreme Court in Halifax regarding the weight to be given to the assessment authority’s assessment:
[40] The Minister’s role under the Act is not to review the assessment authority’s assessment. The Minister’s function with respect to the value of the property is to reach an opinion about the value that would be attributed by an assessment authority. This is done in the context of exercising the discretion to make a PILT that must not exceed the product of the e