New Minas Baptist Church v. Nova Scotia (Assessment)

New Minas Baptist Church v. Nova Scotia (Assessment) Court Supreme Court Date 2017-03-20 Citation 2017 NSSC 72 Docket Ken. No. 453361 Judge/Registrar/Adjudicator Warner, Gregory M. (Honourable Justice) Document Type Decision Decision Content SUPREME COURT OF Nova Scotia Citation: New Minas Baptist Church v. Director of Assessment, 2017 NSSC 72 Date: 2017-03-20 Docket: Ken. No. 453361 Registry: Kentville Between: New Minas Baptist Church Applicant v. Director of Assessment Respondent Judge: The Honourable Justice Gregory M. Warner Heard: January 23, 2017, in Kentville, Nova Scotia Counsel: Andrew J. Sowerby, for the Applicant Robert Andrews, for the Respondent By the Court: [1] Is the portion of a church property occupied by a licensed day care, open to the public, operated by the church, exempt from property taxation as a church or a church hall used for religious or congregational purposes? The answer to this question involves interpretation of the relevant legislation. [2] The court’s answer is in five parts: • Factual matrix; • Principles of statutory interpretation; • The most relevant statutory provisions; • Submissions; and • Analysis and conclusion. Part I Factual Matrix [3] New Minas Baptist Church (the “Church”) originated as a branch of the Third Horton Church in the mid-1800s. In 1958, it became a separate church. On November 4, 2011, it incorporated itself as a society under the Societies Act of Nova Scotia. [4] The southern portion of the present church structure, consisting of a sanctuary and Christian education wing (the latter includes several classrooms, a gymnasium and kitchen), was built in 1986. [5] Also in 1986, the Church appointed a task force to identify the needs of the community with the goal of building bridges between the Church and the community. The task force recommended a Christian day care. [6] A follow-up feasibility report confirmed the recommendation of a day care as an outreach ministry. The report was adopted by the Church, start-up funds were raised, and the day care opened on November 2, 1987. [7] The public announcement stated that the day care was not government subsidized because of its church affiliation, would charge rates comparable to other day cares, would operate from the “Fellowship Centre” portion of the Church in four rooms, and was intended to be a contact point between the Church and the community. [8] The day care was incorporated under the Societies Act of Nova Scotia on January 25, 1998, as the “New Minas Children’s Centre” (“Children’s Centre”). The initial board of directors consisted of Church members. In the 1990s a parent representative (not necessarily a member of the Church) was added to the board of directors. [9] The Church subsidized the day care’s operating expenses until 2002. [10] In 2004, the Church added a meeting room and classrooms onto the north side of the sanctuary and Christian education wing. [11] In 2008, the Church added approximately 13,000 square feet in two zones: Zone C, a large multipurpose room with four classrooms and six offices; Zone D, to the north, a purpose-built day care facility having a separate entrance from the parking lot and consisting of a large play area, six smaller classrooms and an office. [12] The ‘Children’s Centre’ has operated from Zone D since 2008. It operates Monday to Friday. The space is used by the Church when necessary for Sunday School and other unnamed evening and weekend events. [13] The day care has ten staff and an enrollment of 70 children in three age brackets, extending from 18 months to 12 years. [14] The staff are not restricted to members of the Church, but are made aware, on hiring, that the Children’s Centre is a Christian day care facility. The day care is open to the children of all members of the public; priority for enrolment is not given to children of Church members. [15] The operating budget of the day care was about $360,000 in 2015. The revenue consists of tuition of about $258,000 (of which $78,000 are government subsidies) and the remainder consists of government grants. The financial statement shows that the society operates in the black and has an accumulated surplus (called “owner’s equity”) as of September 2016, of about $70,000. [16] The day care does not pay rent to the Church but shares proportionately the cost of utilities, insurance and snow removal. 85% of the day care revenues appear to be spent on salaries in 2015. [17] The fee schedule, for children enrolled in the day care as of September 2015, was $30.00 for a full day; $16.50 for a half day; and, slightly less for pre-school and after-school attendance. [18] The programs carried on at the day care vary with the ages of the children. A review of the weekly event plans for each age group show that in addition to the normal activities (games, dancing, music and crafts), lunch and rest period, there is a daily theme about family, friends, nature and often short rhymes or prayers respecting God’s love of little children. [19] The New Minas Baptist Church land consists of 5.22 acres with one large building. It was assessed as commercial, pursuant to ss. 2(1)(d) and 26 of the Assessment Act (“Act”), and exempt from municipal taxation, pursuant to s. 5(1)(b) of the Act. [20] In 2014 the existence of the Children’s Centre first came to the attention of an assessor. Based on the determination that the Children’s Centre appeared to be operated as a day care open to the public, which was licensed and regulated under the Day Care Act, a visit was made by an assessor. It was noted that the Children’s Centre had its own identifying sign and separate entrance and occupied approximately 4,806 square feet of the 32,205 square feet of the entire building. [21] Beginning in 2015, the exemption from taxation in respect the portion of the structure occupied by the day care was removed. [22] As a result of a meeting between the Commercial Manager of the Provincial Valuation Services Corporation (“PVSC”) that carries out the assessment function for the Province of Nova Scotia and the Church in June 2016, PVSC commenced an investigation into the status of all other provincially regulated and licensed day care operations open to the public, including those located in properties owned by religious institutions that were exempt from taxation under s. 5(1)(b) of the Act. [23] Tendered as an exhibit from the Department of Community Services was a list of the 411 provincially regulated day care facilities, licensed under the Day Care Act. To date, of those 411 day care facilities, PVSC has identified 40 that are operating in properties owned by religious institutions. PVSC is in the process of determining the area in each of these properties occupied by the regulated day cares for the purpose of removing their exemption from taxation pursuant to s. 5(1)(b) of the Act. Part II Principles of statutory interpretation [24] The general principles are thoroughly set out by Ruth Sullivan, Sullivan on the Construction of Statutes, Sixth Edition (Markham: LexisNexis, 2014). [25] This court previously reviewed these principles in Slauenwhite v Keizer, 2010 NSSC 453. This court’s analytical approach was endorsed by the Nova Scotia Court of Appeal, 2012 NSCA 20, and is applied in this decision. [26] At Chapter 2.6, Sullivan writes: The modern principle says that the words of a legislative text must be read in their ordinary sense harmoniously with the scheme and objects of the Act and the intention of the legislature. In an easy case, textual meaning, legislative intent and relevant norms all support a single interpretation. In hard cases, however, these dimensions are vague, obscure or point in different directions. In the hardest cases, the textual meaning seems plain, but cogent evidence of legislative intent (actual or presumed) makes the plain meaning unacceptable. A serious weakness of the modern principle is its failure to acknowledge and address the dilemma created by hard cases. [27] At Chapter 2.8, she divides the potentially multi-layered application of the statutory principles into three questions: • what is the meaning of the legislative text? (the textual analysis) • what did the legislature intend? That is, when the text was enacted, what law did the legislature intend to adopt? What purposes did it hope to achieve? What specific intentions (if any) did it have regarding facts such as these? (the purposive analysis) • what are the consequences of adopting a proposed interpretation? Are they consistent with the norms that the legislature is presumed to respect? (the consequential analysis) [28] Subsection 9(5) of the Interpretation Act of Nova Scotia includes the same considerations, but divides the analysis into seven parts. The subsection reads: Every enactment shall be deemed remedial and interpreted to insure the attainment of its objects by considering among other matters (a) the occasion and necessity for the enactment; (b) the circumstances existing at the time it was passed; (c) the mischief to be remedied; (d) the object to be attained; (e) the former law, including other enactments upon the same or similar subjects; (f) the consequences of a particular interpretation; and (g) the history of legislation on the subject. [29] Using the modern analytical approach, Sullivan’s first question asks for the meaning of the text in context. The modern approach differs from the now obsolete plain meaning approach, which approach stopped the analysis if the text itself was plain. Only if an ambiguity was found did the interpretative process go further. As Sullivan notes, words are neither plain nor ambiguous; rather they are sometimes more plain and sometimes more ambiguous. Words must be interpreted in their context. The ordinary meaning is not necessarily the dictionary meaning or literal meaning. [30] It is appropriate to consult dictionaries, to adopt statutory definitions where they exist, and, when applicable, to adopt technical meanings respecting technical subject matters. [31] But interpreting words in their grammatical and ordinary sense involves consideration of the surrounding text and the application of common sense experience to the relevant text. [32] Courts presume that the legislator is a skillful drafter of the legislative text. Courts therefore presume that the text is orderly, that each word is meaningful and generally that the same words have the same meaning and that different words have different meanings. [33] Textual analysis involves drawing inferences from the circumstance in which the words are used. Recurring inferences sometimes become maxims. Care is taken to remain aware of the common-sense reasoning process that makes some inferences maxims, and not to apply them blindly. Interpretation is a fact-specific analysis. [34] The second Sullivan question seeks to understands the legislature’s intent. At Chapter 9.3 Sullivan writes: Propositions underlying purposive analysis. A purposive analysis of legislative texts is based on the following propositions: (1) All legislation is presumed to have a purpose. It is possible for courts to discover or adequately reconstruct this purpose through interpretation. (2) Legislative purpose must be taken into account in every case and at every stage of interpretation, including initial determination of a text’s meaning. (3) In so far as the language of the text permits, interpretations that are consistent with or promote legislative purpose should be adopted, while interpretations that defeat or undermine legislative purpose should be avoided. [35] This analysis is carried out without regard to whether an ambiguity or absurdity arises from the textual analysis. [36] The purposive analysis does not mean that purpose is more important than the other contextual factors or that it justifies an implausible interpretation. It simply adds an equitable overlay to the textual analysis. Its legitimacy is premised on the remedial construction rule mandated by s. 9(5) of the Interpretation Act. [37] The purposive analysis presumes that the overall concept and particular words used each have a purpose (variously called the object, intent, policy or principle of the legislation). It seeks to understand the reason for the legislation in two ways: first, directly from the legislation, the legislative history and authoritative reports and texts; and secondly, indirectly through inferences drawn from context. The second way relies heavily on a plausibility assessment, called by Sullivan “the norms of plausibility”. [38] While the uses of the purposive analysis are multiple, for the purposes of this case, the court focuses on Sullivan’s reference to McBratney v McBratney, [1919] 59 SCR 550, and her analysis of the two reasons to rely on the interpretation of purpose in interpretation: Of course where you have rival constructions of which the language of the statute is capable you must resort to the object or principle of the statute …; and if one finds there some governing intention or governing principle expressed or plainly implied then the construction which best gives effect to the governing intention or principle ought to prevail against a construction which, though agreeing better with the literal effect of the words of the enactment runs counter to the principle and spirit of. In this passage Duff C.J. asserts two principles that govern judicial reliance on purpose in interpretation. (1) If the ordinary meaning of legislation is ambiguous, the interpretation that best accords with the purpose of the legislation should be adopted. (2) If the ordinary meaning is clear, but an alternative interpretation is plausible and more in keeping with the purpose, the interpretation that best accords with the purpose of the legislation should be adopted. [39] Sullivan concluded at para 9.69: Resolving ambiguity. Ambiguity in the strict grammatical sense – what linguists call semantic or syntactic ambiguity – is widespread in language but is usually resolved quickly and beyond doubt by subconscious contextual analysis. When ambiguity is more difficult to resolve, self-conscious purposive analysis often yields a persuasive reason to prefer one interpretation over the other. [40] The third Sullivan question seeks to discover the consequence of adopting a proposed interpretation. [41] Sullivan writes at Chapter 10.4: Relevance of consequences in interpretation. When a court is called on to interpret legislation, it is not engaged in an academic exercise. Interpretation involves the application of legislation to facts in a way that affects the well-being of individuals and communities for better or worse. Not surprisingly, the courts are interested in knowing what the consequences will be and judging whether they are acceptable. Consequences judged to be good are presumed to be intended and generally are regarded as part of the legislative purpose. Consequences judged to be contrary to accepted norms of justice or reasonableness are labelled absurd and are presumed to have been unintended. If adopting are interpretation would lead to absurdity, the courts may reject that interpretation in favour of a plausible alternative that avoids the absurdity. [42] In Re: Rizzo and Rizzo Shoes Ltd., [1998] 1 SCR 27 at 43, the court wrote “that the legislature does not intend to produce absurd consequences”. Some call this ‘the golden rule’. [43] At Chapter 10.13, Sullivan writes: … Judges test consequences against a range of considerations: • norms of rationality, such as logical coherence and internal consistency • common law norms, such as compliance with rule of law and other presumed intentions • shared community norms, such as fairness and tolerance. [44] Examples of circumstances where “absurd” consequences have been avoided include: (a) where the purpose of the legislation would be defeated (R v Proulx, 2000 SCC 5, at 92); (b) where it would result in persons receiving different treatment for inadequate, irrational or no reasons (Rogers Communications v Society of Composers, 2012 SCC 35, at 29); (c) where the legislation produces an incoherent scheme (Canada v PSAC, [1991] 1 SCR 614); (d) where it would lead to an inconsistency or anomaly when considered in light of related legislation (Mitchell v Pequis Indian Band, [1990] 2 SCR 85); or (e) even where the consequence may not be absurd but rather problematic in that it does not conform to political realities (Northrope Grummun v Canada, 2009 SCC 50, at 41 – 42). [45] Where the purposive analysis justifies preference for interpretations that lead to good consequences, the consequential analysis justifies rejection of interpretations that lead to bad consequences. Both the purposive and consequential analysis are part of every effort to apply legislation to a particular factual matrix (Sullivan, Chapter 10.45). Part III The Legislation [46] The relevant portions of the Assessment Act are: … Taxable property 4 Subject to the exemptions in Section 5, all assessable property and business and residential occupancy assessments are liable to taxation for all purposes for which municipal taxes and rates are levied by authority of law. Exempt property 5 (1) The following property is exempt from taxation under this Act: … (b) every church and place of worship and the land used in connection therewith, and every churchyard and church burial ground and every church hall used for religious or congregational purposes exclusively save only for occasions specially authorized by church authorities and for which no revenue in excess of one hundred dollars per annum is received, but in computing revenue for the purposes of this clause there shall be excluded any contribution paid towards the reasonable additional costs of upkeep imposed by the use; … PROPERTY EXEMPT FROM TAXATION Tax exemption 29 (1) All land in excess of three acres of any non-profit community, charitable, fraternal, educational, recreational, religious, cultural or sporting organization or institution, excluding any buildings or structures thereon, that is subject to taxation and that is used directly and solely for the purposes of the non-profit community, charitable, fraternal, educational, recreational, religious, cultural or sporting organization or institution shall be exempt from taxation under this Act or any other general or special Act of the Legislature authorizing a tax on the assessed value of property except as provided in the Municipal Government Act, unless the proper officers of the organization or the institution prior to the first day of December, 1977, inform the Director in writing that they do not wish this Section to apply to their property. [47] In Section 2 of the Act, the term “assessable property” is defined as including land and buildings affixed to lands; the term “commercial property” is defined as all property or part thereof except residential and resource property. It is not disputed that the Church’s property is assessable as taxable commercial property (the default assessment category) subject only to the exemption claimed pursuant to s. 5(1)(b). [48] Relevant portions of the Municipal Government Act, SNS 1998, c. 18 (“MGA”) include: PART IV FINANCE … Power to expend money 65 The council may expend money required by the municipality for … (au) a grant or contribution to … (v) any charitable, nursing, medical, athletic, educational, environmental, cultural, community, fraternal, recreational, religious, sporting or social organization within the Province, (va) a day care licensed under the Day Care Act, … Tax exemption policy for certain organizations 71 (1) The council may, by policy, exempt from taxation, to the extent and under the conditions set out in the policy (a) property (i) of a named registered Canadian charitable organization, and (ii) that is used directly and solely for a charitable purpose; (b) property of a nonprofit community, charitable, fraternal, educational, recreational, religious, cultural or sporting organization if, in the opinion of the council, the organization provides a service that might otherwise be a responsibility of the council; … Tax reduction by-law for day cares 71A (1) The council may, by by-law, to the extent and under the conditions set out in the by-law, provide that the tax payable with respect to all or part of the taxable commercial property of any day care licensed under the Day Care Act be reduced to the tax that would be payable if the property were residential property, including area rates. [49] Section 71A was added by amendment to the MGA as of May 20, 2004. [50] The relevant portions of the Day Care Act, RSNS 1989, c. 120 are: Interpretation 2 In this Act, (a) "day care" means the providing of services pertinent to a childs physical, social, emotional and intellectual development apart from the childs parents or guardian but does not include (i) organized recreational or religious activities, or (ii) services exempted by the regulations; … (c) "facility" means a building or part of a building at or in which day care is or may be provided but does not include a place such as a hospital or school which is subject to other statutory regulation; … License required 4 No person shall conduct, maintain, operate or manage a facility or hold out that a facility is being operated unless there is a valid license to operate the facility. Part IV Submissions Church’s Submissions [51] It is not disputed that the Church has the evidential burden to prove that it comes within the exemption. The burden of proof is on a balance of probabilities. [52] The Church submits that the entire property is exempt from taxation under s. 5(1)(b) for three reasons: (a) the entire property consists of a church and lands used in connection therewith; (b) if the day care is in a church hall, the day care is used for religious or congregational purposes exclusively; and, (c) if the day care is not a use for religious or congregational purposes exclusively, the Church receives no revenue in excess of $100 per year other than a contribution towards costs of upkeep of the property imposed by the use. [53] It acknowledges that tax legislation is interpreted like all other legislation – in context and with regard to the legislative purpose. Taxation serves many purposes. They include the fostering of social works such as schools and religious institutions. Revenue raising is balanced with the promotion of social goals. In this respect, the Church directs the court to the other properties that are exempt from taxation by s. 5(1). These other exempt properties or uses demonstrate an intent to foster social works. [54] Layered on the modern interpretation approach is the presumption in favor of the tax payor where an ambiguity cannot be resolved using the usual rules. It acknowledges that this is a presumption of last resort. [55] At paragraph 18 of Hussain v Dartmouth, 1996 NSCA 14 (“Hussain”), the Court of Appeal parsed the exemptions in s. 5(1)(b) as follows: (a) Every church; (b) Every place of worship; (c) The land used in connection therewith; (d) Every church yard; (e) Every church burial ground; (f) Every church hall used for religious or congregational purposes on the basis specified in the subsection. [56] Because the legislation distinguishes between a church and a church hall for the purposes of exemption, it argues that the first issue is to determine the difference. Church and church hall are not explicitly defined in the Act. [57] It takes issue with the Director’s view that a church only encompasses the area set aside for public worship or religious services and that the rest of the building is a church hall. It refers to dictionary definitions and the discussion in Hussain. [58] It advocates that a church is the “building” (their emphasis) used for public worship and not just the portion of the building in which a place of worship is located. A church hall is a hall or facility suitable for hosting non-religious social and public gatherings. A church hall may be near to or attached to the church, but is not part of the church building. [59] It submits that its day care is not a non-religious social or public activity. [60] It distinguishes decisions in other jurisdictions respecting the use of church halls, which decisions precluded church halls from tax exemption based on their use: Edmonton v Catholic Archdiocese of Edmonton, 1997 CarswellAlta 1399, affirmed 1998 ABQB 35; and, BCD Holdings v New Brunswick (1971), 19 NBR (2d) 96, affirmed (1979), 24 NBR (2d) 421. [61] The day care facility does not meet the ordinary meaning of a “church hall” – a place rented out to the public for social gatherings and public meetings; rather the facility occupies part of the building that contains the place of worship and is therefore a church. [62] If it is part of a church hall, it is used exclusively for religious or congregational purposes. It relies upon the analysis in Peoples Church v Nova Scotia (1991), 107 NSR (2d) 394, (“People’s Church”) to the effect that the religious academy’s primary purpose was to promote religious teachings and it was therefore exempt from taxation under s. 5(1)(b). [63] Counsel refers the court to the Church’s purpose in starting the day care – as a ministry of the Church to the community. Originally, the day care was supported through donations and was not eligible for government subsidies “because of it’s church affiliation”. It points to the exhibit outlining the event plans for the various day care groups to demonstrate that sharing the gospel with those children who are outside the Church continues to be part of the purpose. [64] While acknowledging the incorporation of the day care as a separate society, it notes that the day care director is under the supervision of the Church’s pastor and that the day care financial reports are presented to the congregation. [65] If the day care is not operated exclusively for a religious or congregational purpose, the Church does not receive revenue over $100 per year, exclusive of the additional upkeep costs incurred by the day care operation. Director’s Submissions [66] The respondent Director submits that the new space built in 2008 to house the day care, consisting of 4,800 square feet of the 2008 13,000-square-foot addition, is not a church; is not occupied exclusively for religious or congregational purposes; generates more than $100 per year in revenue; and, is therefore not exempt from taxation pursuant to s. 5(1)(b) of the Act. [67] It agrees with the Church’s statement as to the modern approach of interpretation of statutes, but it takes issue with the Church’s position regarding ‘the presumption of last resort’, which it says applies only in exceptional cases, after all the usual rules of interpretation have been exhausted and the court is unable to discern the meaning by reference to them. [68] It states that provincially regulated day cares throughout Nova Scotia that are licensed under the Day Care Act, are classified as commercial taxable. The Assessment Act does not distinguish between “for profit” and “not for profit” day cares. In this respect, the Act differs from legislation in some other jurisdictions where charities and not-for-profit societies are given exempt status. In Nova Scotia, recognition of “non-profit” organizations performing services for the betterment of society are found in s. 71 of the MGA and, in respect of day cares specifically, in s. 71A. [69] The express statement of policy in the MGA that provides tax relief for day cares and other not-for-profit organizations, informs the legislative purpose of s. 5(1)(b) of the Act. The Director says exemption for churches does not extend to other ventures like day cares, even if they are motivated by religious values. [70] The Director conducted his analysis by parsing the words in s. 5(1)(b), as described on Hussain, into three potential types of premises: the church, the place of worship, and the church hall used exclusively for religious or congregational purposes. The Director agrees that church and church hall are not defined in the Act. [71] Dictionaries generally define a church as a “building for public worship”. It submits that a day care, that reinforces Christian values in a project to care for other people’s children, in a provincial licensed and regulated facility, for fees, does not make the premises built for and occupied by the day care a “place of public worship”. [72] Rather the day care premises are a place of business in which child care services is offered to the public on a fee for service basis. The principal purpose of the day care premises is the operation of the day care to the general public that competes with other for-profit and not-for-profit day cares. [73] Central to the concept of a “place of public worship” is the coming together of persons, by invitation, to worship publicly. If this were not so, any place where any one or more persons’ worship – which could be anywhere – would qualify as a church. [74] The Director refers to two decisions describing analogous situations. In Young Life v North Shore of Squamish Valley Assessor, 2005 BCSC 1079 (“Young Life”), the court determined that an evangelical summer camp was not a “place of public worship” and therefore not exempt from taxation. In London Youth for Christ v MPAC, 2004 CarswellOnt 6313 (ONSC) (“London Youth”), the legislation exempted from taxation a “place of worship”. The applicant was a non-profit religious organization that owned a 17,000-square-foot centre, consisting of a gym, auditorium, lounge, games room and offices. It ran several programs at this centre with the goal of bringing youth into the church. The court held that, however laudable the goals were, the activities did not “amount to worship in the sense of constituting the physical premises as a place of worship”. [75] The Director points out that even in the People’s Church case, the court held that the religious academy was not a church or place of worship. [76] The Director submits that the day care facility comes under the category of either a church hall used exclusively for religious or congregational purposes or a regular taxable commercial space. [77] In response to the Church’s submission that the day care premises are a church hall used for religious or congregational purposes exclusively, the Director says that he treats the sanctuary or place of worship as a church and the remainder of the premises as a church hall. This church hall included not only the purpose-built day care but several meeting rooms, a gym, a library, a kitchen and offices. Because, in the Director’s view, all of these areas (other than the day care facility) were used exclusively for religious or congregational purposes, the Director assessed them as exempt from taxation under s. 5(1)(b) of the Act. [78] The Director submits that the day care portion of the church hall, used to provide child care services on a fee-for-service basis in a provincially regulated environment to members of the general public, could not be considered to have been conducted exclusively for religious or congregational purposes. This is despite the Church’s intention to operate a day care as a means of reaching out to the community and the fact that the day care was operated based on Christian values. The Director refers the court to the Edmonton decision cited in the Church’s brief, where, at para 14, the Board’s decision, based on the actual use of the facility, showed the use to be a mixture of religious, community, cultural and social activities, and therefore not exempt from taxation. [79] The Director refers the court to the ordinary meaning of the word “exclusively” and suggests it to be: ‘only’, or ‘solely’, or ‘to the exclusion of others’. [80] The Director notes that the factual matrix in this case is critically different from the matrix in the People’s Church case, a decision with little analysis. In People’s Church, the teachers had to be Christians and members of the church, the students on enrollment had to agree with the doctrinal stricture of the church, the church did not seek accreditation for the academy because to do so would require the use of provincial texts, and, while open to the public, priority in enrollment was given to church members. In this case, the day care is open to all, operates on a fee for service basis in the marketplace, gives no preference to church members and does not require adherence to the Church’s religious beliefs. [81] The Director submits that the legislature could not reasonably have intended that the use of the words “save only for occasions specially authorized by church authorities” could apply to a purpose-built day care facility and permanent operation. [82] The word ‘occasion’ is the route of ‘occasional’ and ‘occasionally’ and infers a temporary or occasional use, not a permanent facility. [83] Furthermore, while the day care is a separate incorporated society, the evidence is that its finances are “inexorability linked” with the Church by reason of the Church’s financial oversight of the day care. The day care generates significant revenue from operations, more than $100.00 per year. Church’s reply submission [84] The Church challenges the Director’s submission that only the sanctuary used for public worship is a church. The word ‘church’ denotes the entire church building, not just the sanctuary. A church is a building that includes the sanctuary for public worship, but it is not limited to the sanctuary, nor does it exclude the foyer, hallways, offices or other related uses. [85] The legislature intended, by s. 5(1)(b) of the Act, to exempt the building and not just the sanctuary. [86] Alternatively, the Church argues that the day care premises are also used by the Sunday school and other church activities outside of day care hours. It notes that this day care premise is not a remote camp (Young Life) or a youth centre (London Youth). [87] It notes that, in People’s Church, the Academy was not in a church building or a building used for religious services or public worship, but in a separate building. [88] The Church submits that the day care is not the exclusive user of the day care facility. It only uses the premises on occasions authorized by the Church. [89] With respect to revenues, the day care payments to the Church only partially reimburse the Church for some of the additional cost of upkeep created by the day care and no more. The day care pays no rent. [90] The Church maintains that the correct approach to interpretation of s. 5(1)(b) is: (a) churches are exempt; (b) church halls are exempt if: i. used for religious or congregational purposes exclusively; ii. used for religious or congregational purposes and occasions especially authorized by church authorities, for which no annual revenue in excess of $100 is received (once any contribution towards the reasonable, additional costs of upkeep imposed by the use are deducted). Part V Analysis [91] The onus is on the applicant Church to prove on a balance of probabilities that the “Children’s Centre” day care is exempt from taxation. [92] I apply the modern approach to the interpretation of s. 5(1)(b) of the Act. Ruth Sullivan parses this one approach into three analyses: 1. The grammatical or ordinary sense of the text or textual analysis; 2. The legislative intent or purposive analysis; and 3. The consequential analysis of the proposed interpretations. [93] The s. 5(1)(b) sets out the following exemptions: 1. Every church; 2. Every place of worship; 3. The land used in connection therewith (not relevant to this analysis); 4. Every church yard and church burial ground (not relevant to this analysis); and, 5. Every church hall used for religious or congregational purposes exclusively save only for occasions special authorized by church authorities … (Court comments) [94] Dictionaries and related reference texts disclose many definitions for the word “church”, all of which depend upon context. The most common definitions refer to churches as “a particular sect or denomination of Christians” or “a building set apart or consecrated for public worship”. (These definitions come from my desk copy of Webster’s New World College Dictionary, 4th Edition (New York: MacMillan, 1999). [95] Most dictionaries and reference texts use the term “place of worship” to refer to those buildings or consecrated spaces of any religion where congregations come together to perform acts of devotion. Places of worship include not only churches (Christianity) but mosques (Islam), temples (Hindu), synagogues (Judaism), and other building names for other religions. [96] The first reference in Nova Scotia legislation is to a ‘place of worship’, not to a ‘church’. The Revised Statutes of Nova Scotia, 1851, Chapter 46 “Of County Assessments”, contains no provisions exempting properties or inhabitants from taxation. Chapter 51 of the same Revised Statutes “of Religious Congregations and Societies” makes no reference to churches. Section 1 reads in part: When any number of persons … desire to form themselves into a congregation of Christians for the public worship of God …, they may, by deed, … constitute themselves such congregations … and declare the place where the same as established … and describe in such deed by bounds the particular situation of all lands conveyed to or in trust for the congregation for all purposes connected therewith … [97] The Revised Statutes of Nova Scotia, 1859, Chapter 46 “Of County Assessments”, Section 14, list five groups of property that “shall be exempted from taxation”. The second group begins: “every place of worship, every church yard or burial ground, …”. [98] An Act to Amend and Consolidate Municipal Assessments, RSNS, 1895, Chapter 5, Section 6, slightly changed the wording of this exemption to: “every place of worship, every church or burial ground, …”. [99] This is the first legislative reference to the a “church”. [100] The Assessment Act, RSNS 1900, Chapter 73, Section 4(b) exempted from taxation: Every church and place of worship, and the land used in connection therewith, and every churchyard and burial ground; [101] The Statutes of Nova Scotia, 1954, Chapter 38, Section 1, expanded the exemption to church halls by adding: “and every church hall used for religious or congregational purposes exclusively save only for occasions specially authorized by church authorities and for which no revenue in excess of one hundred dollars per annum is received;” [102] And finally, The Statutes of Nova Scotia, 1977, Chapter 22, qualified the church hall exemption, by this amendment: “, but in computing revenue for the purposes of this clause there shall be excluded any contribution paid towards the reasonable additional costs of upkeep imposed by the use;” [103] For the purposes of this decision the only distinction between a church and a place of worship is that a ‘church’ refers to a place of public worship by Christians, and a ‘place of worship’ refers to any place of public worship of any religious faith. Effectively, a church is a place of worship. [104] Historically, at least anecdotally, Christian churches were either large ornate cathedrals in urban centres or, more often in rural North America they were rectangular structures consisting of an aisled meeting room, possibly with a vestry and a tower, used primarily for public worship on the Sabbath. [105] These cathedrals and ‘little white churches’ still serve their original purpose: public worship on the Sabbath. However, many churches have evolved to serve more ambitious objectives and goals of their congregations. These churches, such as the congregation of the New Minas Baptist Church and those in the case law counsel cited in their briefs, have grown their physical place of worship to facilitate their expanded activities, both for their own congregations and other segments of their community. [106] Reverend Daniel Cormier, in his affidavit, succinctly sets out the “Ends Policy” (or goals) of the church as a covenant community that include local and non-local evangelism, bible teaching and sharing the gospel with those outside the church. [107] The evolving goals of this covenant community have led to several expansions of the physical structure. The Church moved to its present location and completed its sanctuary in 1986. The 2006 architectural drawing attached to Reverend Cormier’s affidavit shows that the original building housed the sanctuary of approximately 11,000 square feet. [108] Three expansions followed adding over 20,000 square feet – first, a substantial Christian education wing to the west; second in 2004, a meeting room, classroom and nursery to the north; and in 2008, to the west a large multipurpose room, offices, studies and classrooms and, to the far west, the purpose-built day care facility of about 4,800 square feet. [109] It is clear from s. 5(1) of the Act that the ownership of the property is only one of the criteria for exemption from taxation. The second criteria involves the purpose or use made by the owner of the property. [110] For example, s. 5(1)(a) exempts property vested in Her Majesty the Queen or persons for government purposes; it excludes from exemption property occupied by a person “otherwise than in an official capacity”. Section 5(1)(d) exempts property of public institutions of learning “with the exception of property mainly used for commercial, industrial, business, rental or other non-educational purposes”. Section 5(1)(h) exempts from taxation property of any municipality “if occupied or used for the purposes of such municipality or unoccupied”. [111] Other subsections of 5(1) make similar references to the exemption being based upon both ownership and use or purpose. [112] In summary, it is not enough that the Church owns the property for which exemption from taxation is claimed. [113] The fact that the description of the exemption in s. 5(1)(b) is not just of a church or place of worship, but also of the church yard, church burial ground and church hall used for religious or congregational purposes, is significant context. It suggests that the definition of a church or place of worship is not so expansive as to incorporate all of the potential activities of a church. To find otherwise would be to find the remaining part of that subsection redundant. [114] In Hussain, at paras. 30 to 35, the court noted the various dictionary definitions of ‘church’ and concluded that a church was a place owned by a religious organization in which that organization intended that the congregation would regularly assemble for worship or to hold services of worship. The court held that, based on the facts in that case, it was not necessary to give a more precise definition. [115] Taking the word “church” and the phrase “place of worship” together, I conclude that the grammatical and ordinary sense of the word ‘church’, in the context of s. 5(1)(b), is a reference to the dedicated sanctuary or place where the congregation meets for public worship and the lands and facilities that are ancillary to, or serve as an aide to, public worship. Without intending to limit what land and facilities might be ancillary and serve to aide in the conduct of public worship, any of which may be particular to the religious sect or the community in which the physical church building is situate, I suggest they could include the sanctuaries or meeting places where public worship is carried out with or without an atrium, chapels, vestries, bell towers, cloak rooms, washrooms, entrances, offices, and other necessary utility or support facilities. A nursery or Sunday school facility, whose purpose is to support public worship by the congregation, may in many circumstances be ancillary to, and therefore part of a church. [116] The term “church hall” first appeared in the legislation in Nova Scotia in 1954. The term is not defined in any related legislation. Counsel have referred the court to case law, mostly from other jurisdictions with similar but not always the same legislation. The case law describes the broad range of uses of facilities owned by various religious congregations in what are called ‘church halls’. Some uses are directed at the congregation and others at other segments of society. The court outcomes depended on the characterization of the use in the context of the applicable legislation. Some of the case law relates to jurisdictions where an exemption exists for properties used for non-profit, charitable purposes. That legislation differs and is not relevant to the circumstance in Nova Scotia, where the exemptions in s. 5(1) of the Act do not refer to the ownership or use of the property in terms of non-profit or charitable purposes. [117] Church halls are sometimes called parish halls. They are places that do not include a dedicated sanctuary for public worship. They normally are located near the church building and are traditionally separate from them. For the purposes of this Act there is no purpose for finding that a church hall must be a separate structure from the church, since it is the ownership and use, not the physical arrangement that governs the analysis. [118] Traditionally activities in church halls include both religious activities and community activities. The case law demonstrates a wide range of activities carried out. They clearly include activities whereby the church, that is, the congregation, were reaching out to the community at large or to segments such as youth or a particular cultural, linguistic or national group attached to the religious community. [119] What is relevant in this case is not that the activity takes place in a church hall versus a church, but whether the activity of the day care is a use of the church hall for religious or congregational purposes exclusively. [120] This leads to the question of whether the operation of a public, licenced and provincially regulated day care, for which fees are charged for attendance, and subsidies received from government, is a use of a church hall for religious or congregational purposes exclusively. [121] The Church submits that this day care was started and continues to be part of its outreach to the New Minas community and is therefore an activity conducted for a religious purpose. [122] I am not satisfied that every activity carried out by a religious congregation is exclusively for a religious or congregational purpose. If a congregation, based on its evangelical or humanitarian beliefs and a recognition of needs in the community, were to construct and operate a seniors’ residence, a retail thrift or discount store, or a bakery, other than for the primary benefit of its own congregation, and in competition with similar non-religious operations, it is not conducted exclusively for religious or congregational purposes. The operation of a public service, based on a congregation’s religious values, is not synonymous with operation for religious or congregational purposes only. [123] To say otherwise would be to say that any activity carried out by a congregation or church that involved the use of real property would be exempt from taxation. [124] The word “religious” has many dictionary definitions. The relevant meaning depends upon context. A broad meaning could be: “characterized by adherence to a religion”. Another could be: “of, concerned with, or appropriate to, or teaching religions”. [125] “Congregational” means “of or like a congregation”. A congregation is a group of people who come together for religious worship. [126] In ordinary language, use of a church hall for religious or congregational purposes is a use primarily directed to the members of church community, not a use focused on a service to the public community. Because s. 5(1)(b) of the Act includes the word ‘exclusively’, the ordinary language applicable to a use in a church hall must be read as exclusively, not primarily. [127] The interpretation of “used for religious or congregational purposes exclusively” is modified by the following words “save only for occasions specially authorized by church authorities …” [128] The word “occasions” suggests that a church hall may be used for purposes other than religious or congregational purposes exclusively. [129] The Church submits that, even if the day care is not used exclusively for religious or congregational purposes, its operation does not generate to it more than $100 per year, exclusive of the day care’s contribution towards additional maintenance costs it generates. [130] The Director submits that the court should interpret the word “occasions” as found in s. 5(1)(b) to mean ‘on occasion’. [131] ‘Occasion’ is the root of ‘occasional’, an adjective, and ‘occasionally’, an adverb. These words have many meanings depending on context. ‘On occasion’ usually means ‘once in a while’ or ‘sometimes’ or ‘occasionally’. ‘Occasional’ can mean ‘of or for a special occasion’ or ‘of irregular occurrence; happening now and then; infrequent’. ‘Occasionally’ can mean ‘now and then; sometimes; on occasion’. [132] The phrase in which the word ‘occasions’ appears reads: “save only for occasions specially authorized by church authorities”. [133] In its grammatical sense, the word ‘occasions’ in the context of that phrase in s. 5(1)(b) clearly implies occasional events specially authorized. [134] I agree with the Director. The exception to the exemption from taxation given for a church hall used exclusively for religious or congregational purposes implies a more limited, casual or occasional use of the church hall than by a permanent day care operating in a purpose-built facility. [135] The ongoing and primary use of the day care facility is as a day care, for which the facility was designed and built. It is not an occasional use. [136] It is not necessary to decide whether the fact that the day care was incorporated as a separate society whose finances are legally separate from the church, or the fact that the Society does not pay rent to the Church but only contributes its pro rata share of expenses related to the operation of the day care facility, entitles the Church to the exemption from taxation because I find that the day care operation is not an occasional use of a church hall. [137] If the operation of the day care was for the benefit of members of the congregation, I may have concluded that it constituted a use for a religious or congregational purposes. The matrix in this case is of a public licensed subsidized, fee-for-service, day care of the kind carried out by several other non-religious public licensed day cares in Nova Scotia. [138] If the day care facility is not part of a church hall, but rather a part of the church, I conclude that this day care is not used for a purpose ancillary to, or in aide of, public worship by the congregation. [139] The foregoing was the textual analysis. [140] The second analysis inquires into the purpose of the legislation. [141] The court has already set out the evolution of s. 5(1)(b) of the Act in answering the first question. [142] Section 5(1) of the Act sets out the basis for exemption from taxation. The Church submits that the implied purpose of the exemptions in s. 5(1) of the Act is to foster social works of the enumerated groups. The Director replies that s. 5(1) of the Act, contrary to some other jurisdictions and other Nova Scotia legislation, does not distinguish between non-profit or charitable activities and for-profit activities. [143] As noted in Part III of this decision, Section 29 of the Act specifically provides that, excluding buildings and except as provided in the MGA, all land over three acres of a non-profit, community or religious organization shall be exempt from taxation. Unlike Section 5(1), this is an express exemption from taxation for some of the land (excluding buildings) upon which non-profit or religious activities occur. [144] Section 71 and 71A of the MGA expressly provide further exemptions from and reductions in taxation. Section 71 permits a municipal council, by policy, to exempt from taxation (to the extent of the policy) property of a registered Canadian charity used directly and solely for a charitable purpose, and property of any non-profit community or religious organization that the council determines to be providing a service that would otherwise be the responsibility of the council. [145] Section 71 of the MGA and Section 29 of the Act expressly provide relief from taxation to organizations promoting social works. [146] Most relevant to this purposive analysis is s. 71A of the MGA. It expressly provides the means by which a municipal council may reduce taxes for a day care licensed under the Day Care Act. This express provision for taxation relief to day cares licensed under the Day Care Act is contraindicative of an inference of a total tax exemption under s. 5(1)(b) of the Act for a day care licensed under the Day Care Act on church-owned property. [147] I conclude that the purposive analysis is consistent with the textual analysis. A public fee-for-service day care, licensed under the Day Care Act, and in receipt of government subsidies, operated by a church on church property is not exempt from taxation under s. 5(1)(b) of the Act. [148] The third question asks whether the adoption of a proposed interpretation is consistent with the established legal norms that the legislature is presumed to respect. Asked differently, does the presumed intent of the legislature embrace evolving common law, constitutional and interpretative norms? [149] The consequence of interpreting s. 5(1)(b) of the Act so as to exempt the day care facility from taxation would be to permit a public, provincially licensed and regulated fee-for-service day care to compete with approximately four hundred other similar public day cares on an unequal financial footing. [150] It is not plausible that the ordinary meaning of the legislative text would permit what is otherwise a commercial activity to be exempt from property taxation simply because it is operated on church property, based on Christian values, when its competition is subject to taxation at the commercial tax assessment rate. It would only be plausible if this day care was not a public day care but rather a service provided to its church members. [151] Efficacy involves measuring the effectiveness of the intended legislative intent. Sections 71 and 71A of the MGA specifically provide for tax relief for non-profit community and religious organizations and licensed day cares on a basis that differs from, and is inconsistent with, the relief that is claimed to be available by implication pursuant to s. 5(1)(b) of the Act. That is not a likely intent or efficacious result. [152] The onus is on the Church to establish that the day care facility is exempt from taxation pursuant to s. 5(1)(b). [153] The “presumption of last resort” in favor of a tax payor is an exceptional presumption of last resort. There is no need to resort to it. [154] The ordinary meaning of a ‘church’ is of a place of public worship. The ordinary meaning of a ‘church hall used for religious or congregational purposes exclusively save only for occasions specially authorized’, does not include a public licensed regulated fee-for-service Christian day care operated in the same manner as most licensed public day cares in Nova Scotia. [155] Occasional use of a church for non-religious purposes does not include a permanent day care which is the primary user of a purpose-built facility. [156] The court finds that the day care facility is not exempt from taxation pursuant to s. 5(1)(b) of the Act. [157] The Director advised that he was not seeking costs if successful. No costs are ordered. Warner, J.