Property Taxes Reduced Due To Air Pollution - International Law Office

Over 100 property owners in Welland, Ontario were successful in appealing their property tax assessments on the basis of adverse impacts due to industrial air pollution caused by a nearby factory.

The properties were originally constructed to house employees of two large local factories. Evidence was introduced which established that one of those factories was "the source of the PAHs (polycyclic aromatic hydrocarbons) detected in tree foliage samples" within the affected area. Although the factory had made efforts to reduce air emissions, evidence was introduced to establish that "satisfactory abatement was far from complete".

What is significant is that no evidence was introduced which demonstrated an adverse impact on property value due to the pollution. The evidence that was introduced by the home owners dealt only with the pollution:

"Their evidence conclusively demonstrates a plume of industrial fallout, impacting in particular properties more closely oriented to Ucar and gradually receding as the distance increased. The commissioner's case did not refute this evidence except, as mentioned, to deny the relevance of this evidence to an issue of inequitous assessment where the market does not appear to recognize these grounds for reduction in a quantifiable manner."

The key question to be addressed by the board was whether or not it should recognize the complaints related to the pollution as sufficient grounds for a reduction in assessment without evidence on loss of market value. The board stated that it was not surprising that the market "has not reflected a value consequence between those properties that are impacted, and those that are not". The board concluded that on the basis of the evidence related to the pollution, reductions in the property assessments were warranted. Using isopleths (lines connecting points having an equal incidence of a specified meteorological feature) based on PAH concentrations in silver maple foliage, the board reduced land assessments for the impacted properties by 5% to 20% based on where those properties were located relative to the isopleth.

The decision has potential consequences in any situation where pollution is found to occur, despite the absence of market evidence establishing reduction in value due to such pollution.

For further information on this topic please contact Harry Dahme at Gowling Lafleur & Henderson by telephone (+1 416 862 4300) or by fax (+1 416 862 7661) or by e-mail (harry.dahme@gowlings.com).
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