The recent decision of the Québec Administrative Tribunal in Indorama c. Montréal, 2017 QCTAQ 07874, fundamentally changes how the values of single-use buildings ("SUB") on municipal assessment roll are challenged and defended. For the first time, the Tribunal acknowledged that cities cannot request an increase in the value of a SUB as a result of an owner's contestation of the roll before the Tribunal.

Indorama, represented by McCarthy Tétrault, requested by way of motion that the City be ordered to maintain the economic obsolescence of 20% communicated by the City’s assessor. The City argued that the values exchanged by the parties did not bind them before the Tribunal. The interpretation proposed by the City was intended to allow it to request an increase in value once before the Tribunal.

The Tribunal agreed with Indorama and found that the values exchanged between the parties established a “ceiling” for the City and a “floor” for the owner, which were binding for each party before the Tribunal.

The Tribunal’s decision, which is now final, is consistent with the legislator’s intent in creating the SUB system “to force the parties to accomplish serious work before the deposit of the assessment roll in order to establish the depreciated cost of the SUB and to hold them to the values then exchanged, from the deposit of the roll through the various stages of the roll’s contestation, so as to allow only a reconciliation between the City and the owner’s position” (unofficial translation of para. 48 of the decision).

This decision should reduce the complexity and financial risks of hearings before the Tribunal for SUB owners by preventing cities from seeking value increases in defense against decreases claimed by taxpayers. About 20 years after the introduction of the SUB regime, sections 18.2 to 18.4 of the Act respecting municipal taxation will finally take full effect.