Assessment Review Board Decision Regarding the Resolute Pulp and Paper Mill in Thunder Bay
Pickering, July 20, 2015 – On July 3, 2015, the Assessment Review Board (ARB) released a decision regarding the assessment of the Resolute (formerly Bowater) Pulp and Paper Mill in Thunder Bay. Bowater appealed the 2008 assessed value and was successful after the ARB heard extensive evidence and submissions from the Municipal Property Assessment Corporation (MPAC), Resolute and the City of Thunder Bay.
The ARB, an independent tribunal of the Ontario Ministry of the Attorney General, reduced the 2008 value (applicable for the 2009-2012 property tax years) from $72.23 to $32.62 million.
With limited sales of similar large and special purpose properties, properties such as the Resolute Mill are complex to value. Like most assessment jurisdictions and in keeping with international property valuation standards, MPAC uses the cost approach in its valuation which begins with estimating land value and any improvements made to the land such as buildings or structures. A key step in the valuation process for these properties is the consideration of all forms of depreciation including functional and external obsolescence as well as physical depreciation.
During the Resolute appeal, MPAC presented a value of $37.43 million after taking into consideration two ARB decisions from January 2013 with similar forms of depreciation affecting the value of Domtar Mills in Dryden and Espanola.
Following recommendations from the Special Purpose Business Property Assessment Review (SPBPAR) made by the Ministry of Finance in 2013, MPAC has started a new pre-roll consultation process ahead of the next province-wide Assessment Update in 2016. The first step in this process was the publication of Methodology Guides for 12 large and special purpose properties—including pulp and paper mills. The guides were developed in consultation with stakeholders and municipalities and part of MPAC’s efforts to provide greater transparency, predictability, stability and accuracy in how we assess such properties.
MPAC recognizes and appreciates the tax revenue impact this decision will have on the local community. In keeping with SPBPAR, our goal is to provide an environment in which municipalities, property taxpayers and stakeholders can contribute to the assessment process and to help identify and resolve any issues prior to values being finalized for the 2016 Assessment Update.
Cathy Ranieri Sweenie
Director, Public Affairs