Community Hubs - Assessment Guide

In August 2016, the One-Year Progress Update was released on the Ontario Government’s “Community Hubs in Ontario: A Strategic Framework and Action Plan.”

One of the goals of the Plan is to develop a framework for making better use of public properties to become community hubs, e.g., surplus or underutilized schools, post-secondary education facilities, hospitals, municipal property and provincial property.

What is a Community Hub?

Community hubs are a service delivery model that brings together service providers to offer a range of high-quality and accessible community services that respond to demonstrated community needs and priorities, including:

  • affordable housing
  • social services
  • cultural services
  • recreation services
  • adult education
  • employment and training
  • health services
  • legal aid
  • senior services
  • child care and mental health and addictions

A community hub can be located at a school, a neighbourhood centre or another public space. Each hub is as unique as the community it serves.

Municipal Property Assessment Corporation

The Municipal Property Assessment Corporation (MPAC) is responsible for accurately assessing and classifying all property in Ontario for the purposes of distributing municipal and education property taxes in compliance with the Assessment Act (the Act) and Regulations set out by the government of Ontario. MPAC also determines the tax liability of property and whether a property is eligible for a property tax exemption.

Property Classification

All land in Ontario must be assigned to a property class or classes for property taxation purposes. Section 7 of the Assessment Act states that the Minister shall prescribe classes of real property for assessment purposes. These property classes are defined in Ontario Regulation 282/98. MPAC is required to classify property in Ontario based on its use in accordance with each property class as defined by the Minister in the regulation.

Non-profit organizations, similar to service providers often found in community hubs, may qualify for the residential property class if they own and occupy a property. However, where they are a tenant and lease space from a municipality, school board, church or other exempt organization, the ownership requirement in the residential property class are not met, and the property or portion of property occupied by the organization defaults to the commercial property class.

Charitable and Not-For-Profit Organizations in Ontario

Charitable and not-for-profit organizations are not always exempt from property tax, despite being exempt from income tax under the Income Tax Act (Canada). Under the Act, all properties in Ontario are subject to assessment and taxation except for those that are exempt pursuant to section three of the Act.

Property Tax Exemptions

In determining the tax liability of a property, consideration must be given to who owns the land, who occupies the land (i.e., owner-occupied/tenant) and for what purpose they occupy the land. To qualify for exemption, the land must typically be “owned, used and occupied” by the exempt body. Where land is occupied by a tenant, exemption may not be applicable. It is up to the registered charity or a non-profit organization, or other institution, to demonstrate that it falls under one of the exemptions contained in section 3(1) of the Act to be exempt from property tax.

Supporting Documentation

Each property is unique. To determine the classification and/or tax liability of a property, each property must be individually reviewed based on its specific fact situation. MPAC requires supporting documentation which may include:

  • owner verification - registered transfer/deed of land
  • letters patent - states the objects of the corporation
  • lease/licence agreement/operation or management agreement
    • clarifies relationship between property owner and any other organizations or individuals occupying and using the property
  • other Items
    • financial statements - public funding
    • mission statement
    • pamphlets/brochures
    • client profile
    • a complete description of the uses and activities of the occupied areas
    • floor plan/diagram identifying the areas occupied by the owner/organization

Note: The applicable law prevails to the extent there is any conflict between this information and the current law. This information is not intended to provide legal advice and should not be relied upon as such.