Businessman Howard Silver wants an independent inquiry into Calgary’s tax assessment department. Council should do it.These city tax people, and the council-appointed review panel, hit Silver’s downtown Metropolitan Conference Centre with a 400 per cent increase in tax assessment.That’s not so unusual these days. But this case stands out because Silver took the city to court — and won.Court of Queen’s Bench Justice M. David Gates found that the city’s actions were unjustified. His ruling gives a distinct impression of overbearing power.One sample quote: “the assessment falls outside of any possible outcome justifiable on the evidence …”Silver sent a letter to all councillors, demanding that the people who put him through this ordeal have their own moment on the griddle.“Unpleasant doesn’t begin to describe my recent experience with the assessment department and the CARB (Calgary Assessment Review Board),” he wrote.“Ultimately, it took me five years, and more legal fees than most small businesses could afford, to get justice.”City assessment boss Nelson Karpa calls the whole dispute “a difference of opinion.” He says, “We always want to work with the business owners,” and the city always prefers not to go to court.“Difference of opinion?” says Silver. “Hogwash. The judge ruled on facts, not opinions.”Despite the ruling, Karpa doesn’t see a need to change the way things are done.Silver sees an entirely different picture of a business being squeezed on grounds that were not justified.This story is of high interest as many business owners now complain that assessments appear arbitrarily based on confusing criteria.
CALGARY; MAY 05, 2015 — A subdued room in the PC headquarters at the Metropolitan Conference Centre in Calgary. Photo Leah Hennel, Calgary Herald
The Met Centre hosts everything from business groups to memorable political gatherings, including the Progressive Conservative event after the great loss of 2015.In 2014 Silver got a hugely expensive shock. The city assessors decided to re-classify his centre from “assembly space” to “retail.”In his ruling against the city and the review board, Gates says the re-classification increased Silver’s tax assessment from $144,088 in 2013 to $538,203 in 2014 and $638,352 in 2015.The Met Centre was hit with mammoth tax hikes just as the towers were hollowing out, severely lowering his revenue.This wouldn’t matter so much if Silver had indeed converted his business from an assembly place to a retail business.But he had not. He hadn’t done a thing to change the nature of the space. He had no plans to change it and has none now.The reclassification was wrong, according to Gates. It was based on irrelevant comparisons and the city’s assumption the space had a vague potential to be retail, someday.Silver turned to the review board, which twice rejected his appeals.Gates wrote: “The only conclusion I can reach is that the 2014 board’s decision to uphold the assessment falls outside of any possible outcome justifiable on the evidence before it.”Of the later appeal, the judge found no “indication in the 2015 Board’s reasons that it adhered to its legislated mandate of ensuring that the valuation standards were applied in a fair and equitable manner.“Rather, the reasons suggest that because the Board was unable to determine the question of classification, it simply deferred to the approach taken by the assessor.”Gates cancelled both decisions and sent them back to CARB.The judge clearly feels the case has wider meaning for the city.Application of standards is important “to all taxpayers involved in an assessment dispute, and has wide-ranging implications going beyond the parties,” the judge wrote.At another point he said: “It becomes very difficult for taxpayers to engage in meaningful financial planning when assessments fluctuate vastly year to year, absent any difference in the market or the use or condition of the premises.”Silver faced a third “retail” assessment in 2016. After two years of legal warfare, the city still wouldn’t bend.But then a funny thing happened. In a separate matter involving rent, an arbitrator valued Silver’s business space at almost exactly the old public assembly rate.It was clear evidence of precisely what Silver had been saying all along. The city’s case collapsed.CARB then fell back to the old assessment category. Karpa cites this as an example of fairness.
February 22, 1996 – Howard Silver outside the entrance to The Metropolitan Centre. Photo by Bill Herriot, Calgary Herald.
But the 2014-15 tax grabs stayed in the city’s pocket. It was two more years — last Dec. 3, in fact — before the Court of Queen’s Bench ruling came down.Last week, Silver received a $65,000 cheque from the city for his legal expenses. He’s expecting the tax refunds soon.Now Silver wants council to “launch a fair, transparent, inclusive and independent inquiry into the city assessment department’s treatment of his file … and the CARB’s practices and treatment of Calgary businesses and homeowners.”So far, Jeromy Farkas of Ward 11 is the only councillor to respond to Silver’s letter.“I think his request for an inquiry is reasonable,” Farkas says.“There is an impression this city is somehow gaming assessment. He definitely has a valid case and I’ve had many, many similar examples brought to me, that defy explanation.“Assessment almost operates like a black box. Nobody is exactly sure how the city comes up with the numbers it does.”Silver’s court ruling does give us a rare glimpse into the black box. It’s weird in there.Don Braid’s column appears regularly in the Calgary Herald.firstname.lastname@example.orgTwitter: @DonBraidFacebook: Don Braid Politics