Ontario's wind power strategy will go under the microscope Tuesday in eastern Ontario in what could be a precedent-setting case over the impact wind farms have on local property values.

Edward and Gail Kenney, retired civil servants who have lived on Wolfe Island for 48 years, are appealing their property tax assessments, set at $357,000, arguing that the 86 wind turbines erected around their home have driven down their property values and should be acknowledged in their tax bills.

Government officials argue that wind turbines have no impact on property values. CBC

“We figure we’ve lost 40 to 50 per cent of the value of these places,” Edward Kenney told CBC News as he looked out at the stands of turbines installed several years ago, some within 400 metres of his home — a distance no longer allowed by the Ontario’s environmental regulations.

The municipality of Frontenac Islands is fiercely contesting the case, fearing that if the Kenneys are successful it could have far reaching effects on tax revenues for the largely rural lakeside community of just 1,300 people.

Tax officials watching case closely

In fact, the Municipal Property Assessment Corporation (MPAC), a Crown corporation in charge of assigning values to properties for tax purposes, has twice offered to settle the case.

And though the Kenneys would welcome the end of this costly 30-month battle in front of Ontario's Assessment Review Board (ARB), MPAC and the municipality insist on making no reference to the wind turbines as a factor in offering the deal.

Because of that insistence, the Kenneys are prepared to stand up without legal representation against the lawyers for the other side, solely on principle of the public’s right to know.

"In this small community," said Edward, 72, who built the house there in 1965, "we've had enough of the secrecy, and the divisions it has caused, and we won't have any part of that.”

Added his wife Gail: "The people affected by these turbines have the right to know."

The Kenneys argue that there have been virtually no real estate sales in the last three years near the turbines on Wolfe Island.

"And the three that have been sold," said Edward, "had been advertised for long periods of time and they sold at sizable losses."

The debate comes down to competing experts.

'There's not a lot of evidence one way or the other.' —Rose McLean, MPAC

“There is no negative impact on property value, by virtue of the proximity to wind turbines,” argues Tony Fleming, lawyer for Frontenac Islands, which commissioned a consultant's report by a certified real estate appraiser, Rayner & Associates. It concludes that based on existing sales data and comparisons of various properties on the island “the wind farm has had no measurable impact on value … over the last four years.”

Edward Kenney said he doesn't think much of the report. “What other issues do we have? The turbines are our issue.”

Rose McLean, director of legal and policy support for MPAC, acknowledges this case could prove to be an important precedent. Though MPAC is studying the issue, she says “there is no evidence across the province that wind turbines drive down local property values.”

McLean says there’ve simply been too few sales of properties adjacent to wind farm turbines for MPAC to change its policy. Currently assessors are directed to deny any appeals or "requests for reconsideration."

“There are not a lot of sales across the province of properties right next to turbines,” says McLean, “Less than 20 in the whole province, if my memory serves. So there’s not a lot of evidence yet one way or another.

“We’d certainly welcome some guidance on this [from the ARB].”

Only 1 tax reduction so far

To date, only one property owner in Ontario has had a tax assessment reduced due to wind turbine issues. It was in the Township of Amaranth, which is near the Melancthon wind facility, home to 133 turbines in Ontario’s first and largest industrial wind farm. In that case a property adjacent to a transformer suffered consistent noise problems.

The only property owners close to turbines routinely enjoying a property increase are those who have leased lands to host the turbines themselves. The revenue from those lease agreements have added value to those properties as the turbines provide an annual source of income.

Edward Kenney, though, rues the fact the turbines have created a divided countryside — those for the turbines, who benefit financially, and those who suffer the noise and other negative effects.

The Kenneys' appeal — along with an appeal by a second property owner in Amaranth (close to the Melancthon wind farm) — could have far-reaching implications for municipal tax coffers in communities hosting wind farms if landowners are granted cuts to their taxes.