Executive Summary: Key Legal and Evidentiary Issues

• Dispute centers on the correct classification of the property’s “best and most profitable use” for municipal tax assessment purposes.

• The appropriateness of the valuation methods applied by the administrative tribunal is questioned.

• Whether the administrative tribunal erred by focusing on the identity of the tenant rather than the actual use of the premises.

• The significance of the amount in dispute and its broader implications for similar properties across Quebec.

• The presence of potentially serious legal errors and whether these justify granting leave to appeal.

• Consideration of whether the issues raised are novel or controversial within Quebec jurisprudence.

Background and facts

The case involves the Société québécoise des infrastructures (SQI), which owns a building located at 725, rue Harvey Ouest, in the city of Alma, Quebec. This building houses several government tenants, including the Ministry of Justice and other provincial agencies. The dispute arose from the property’s valuation for the 2022–2024 municipal tax roll. The SQI challenged the value assigned to its property by the Ville d’Alma, arguing that the assessment was too high and did not reflect the building’s proper use or market value.

The Tribunal administratif du Québec (TAQ), section des affaires immobilières, initially heard the case. The SQI contended that the building should be classified as office space, which would result in a lower valuation, while the Ville d’Alma maintained it should be classified as an institutional property, justifying a higher value. The TAQ ultimately sided with the city’s position, classifying the property as institutional and setting the value at $10,382,000, slightly less than the city’s expert’s figure but well above SQI’s proposed value.

Legal issues and tribunal analysis

The main legal issues revolved around whether the TAQ erred in its determination of the property’s “usage le meilleur et le plus profitable” (best and most profitable use, or UMEPP) and whether it applied the correct valuation methods. The SQI argued that the TAQ improperly considered the identity of the tenants (primarily government agencies) rather than the actual use of the premises, and that this led to errors in both the classification and the valuation method chosen. The city’s expert relied solely on the cost approach, while the SQI’s expert advocated for the income approach.

The TAQ’s decision was challenged on the grounds that it may have made legal errors by focusing on the tenant’s identity and by not properly applying the criteria for determining the UMEPP. The case also raised broader questions about how such government-occupied properties should be valued for tax purposes, with potential implications for similar properties across Quebec.

Outcome and decision

The Cour du Québec was asked to decide whether to grant SQI permission to appeal the TAQ’s decision. After reviewing the file, the court found that the issues raised were serious, potentially involved legal errors, and were of sufficient importance and novelty to warrant appellate review. The court granted SQI’s request for leave to appeal, authorizing it to challenge both the classification of the property’s use and the valuation methods applied by the TAQ. The judgment did not resolve the underlying dispute or alter the property’s assessed value; it simply allowed the appeal to proceed. No monetary award or damages were granted in this decision, and the only financial order was for SQI to pay the applicable court registry fees, with all other costs to follow the final outcome of the appeal. The successful party in this procedural decision was the Société québécoise des infrastructures. The total amount ordered in favor of the successful party cannot be determined at this stage, as the judgment only concerns permission to appeal and not the merits or monetary aspects of the case.