Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 27, 2015 FILE NO.: WR 133140 Assessed Person(s): M. M. U. and H. U. Appellant(s): M. M. U. Respondent(s): City of Toronto Property Location(s): Withheld Municipality(ies): City of Toronto Roll Number(s): Withheld Appeal Number(s): 2973322 Taxation Year(s): 2013 Hearing Event No. 578947 Legislative Authority: Section 323.(1)(e) of the City of Toronto Act, 2006 Heard: June 17, 2015 in Toronto, Ontario

APPEARANCES:

Parties	Counsel+/Representative
M. M. U.	Self-represented
City of Toronto	C. Tanner and L. Verastegui

DECISION OF THE BOARD DELIVERED BY MARILYN SHARMA

ISSUE

1The issue before the Assessment Review Board (“Board”) is to determine whether the Applicant’s property taxes for the taxation year 2013 should be cancelled, reduced or refunded because of the Applicant’s inability to pay due to sickness or extreme poverty under the City of Toronto Act (“Act”) s. 323.(1)(e) 2006.

DECISION

2The Board finds that the Applicant has failed to qualify for relief under the Act s. 323.(1)(e) 2006 regarding an inability to pay part or all of his taxes due to “sickness” or “extreme poverty.”

3The Board therefore dismisses the application for the cancellation, reduction or refund of taxes for the taxation year 2013.

REASONS FOR DECISION

4The Act s. 323.(1)(e) 2006 states that “Upon application to the City Treasurer made in accordance with this section, the City may cancel, reduce or refund all or part of the taxes levied on land in the year in respect of which the application is made due to sickness or extreme poverty. Hence a two part test must be applied. Firstly, the Board must determine whether sickness or extreme poverty exists. If neither sickness nor extreme poverty exists, then the application fails. Secondly, if either is present the Applicant must demonstrate an inability to pay some or all of the taxes.

Sickness

5In Exhibit 2 (Section 2) is a copy of a letter from Dr. B. Nathoo of the York Central Hospital which was submitted by the Applicant to the City. The letter states that the Applicant M. M. U. has “End Stage Renal Failure and has dialysis three times a week, for four hours a session.”

Extreme Poverty

6In addition to sickness, the Board must also assess the application on the basis of the Applicant’s inability to pay his taxes due to “extreme poverty.”

7In determining whether an Applicant can be reasonably expected to pay part or all of his/her taxes the Board is required to examine the evidence presented by the Applicant as well as analyze the overall financial situation (including, but not limited to, expenses and income) of the Applicant and assess after consideration of all the evidence and factors whether the Applicant was in a situation which prevented him/her from meeting all or part of his/her tax obligation.

Document Disclosure

8The Applicant filed a completed “Form 1 – Financial Information” which showed the various sources of income and the application of the income to the various categories of expenses incurred.

9The Applicant did not complete the “Form 2-Doctor Statement” but instead submitted a letter from a Doctor of the York Central Hospital that described the medical condition of the Applicant M. M.U.

10The Applicant submitted a copy of a “Disability Tax Credit Certificate” dated August 2011 with an accompanying declaration by a medical practitioner (Part B) that, among other things, declares that the Applicant has severe restrictions and difficulties with activities of daily living due to his sickness.

11The Applicant and his spouse submitted their respective notices of assessment from the Canada Revenue Agency for the taxation year 2012.

12The Applicant submitted a copy of a statement of assistance from the Ontario Disability Support Program for the month of June 2013 showing the Applicant’s monthly income.

Assets

13The Applicant owns and lives in a Condominium Unit located in west Toronto. The property was purchased in 2008 by the Applicant and his wife for a sum of $293,000. The Assessed Value of the property for 2013 taxation year was $292,500. The Bank of Montreal holds an existing mortgage against the property in the amount of $145,000 as of 2013.

14The Applicant stated that he owns two vehicles that have a combined value of approximately six thousand ($6,000.00) dollars. One vehicle was described as a 2007 Dodge and the other was not identified.

Sources of Income

15The Applicant provided Notices of Assessment from the Canada Revenue Agency for the taxation year 2012 for both himself and his wife. The Notice of Assessment for Applicant M. M. U shows a total income of $24,552 for the taxation year 2012; while that for his wife was zero.

16The Applicant stated in Form 1 – Financial Information that in 2013 that the only source of income was from the Ontario Disability Support Program in the amount of $2,701.65 per month which was verified by the submission of a Statement of Assistance from the Ministry of Community and Social Services.

Analysis of Income and Expenses

17The Applicants filed a Form 1 –“Financial Information” for the taxation year 2013 which is summarized below:

Income: (Adult 1 & 2) Ontario Disability Support $2,701.65 TOTAL $2,701.65

Expenses: (Adult 1 & 2) Mortgage $ 539.00 Condo. Fees $ 750.00 Property Taxes $ 185.00 Home Insurance $ 55.00 Auto Insurance $ 335.00 Gasoline $ 150.00 Car Repair & Mtce. $ 100.00 Water $ incl. in Condo Fees Hydro $ incl. in Condo Fees Heating $ incl. in Condo Fees Cell Phones $ 105.00 (Two Phones) Telephone $ 35.00 (Land line) Internet $ 35.00 Cable $ 70.00 Groceries $ 600.00 Outside Meals $ 10.00 Transit/TCC $ 84.00 Clothing $ 50.00 Sundries $ 100.00 Credit Card Charges $ 46.00 TOTAL $ 3,249.00

Assets Real Estate : $292,500 (2013 Assessed Value) (xxx Steeles Avenue West Suite xxx) Automobiles $ 6,000 TOTAL $298,500

Liabilities Mortgage $145,000 Credit Cards $ 1,000 Personal Loans $ 2,220 TOTAL $148,220

18Based on the information submitted in the Form 1 – Financial Information, the net worth of the Applicant is ($298,500 minus $148,220) $150,280.

Analysis

19The test under s. 323 of the Act refers to whether the Applicant is unable to pay his/her property taxes due to sickness or extreme poverty. The Board accepts the medical report in Exhibit 2 and deems that the Applicant has satisfied the eligibility criteria of “sickness” as set out in the Act.

20As stated earlier, the eligibility criteria for relief is premised on a two-part test, that is, either sickness or extreme poverty. In this case, evidence was presented to demonstrate to the Board that the Applicant has met the requirement for relief under the sickness test. The Board must now determine whether the Applicant’s sickness adversely affected his ability to pay all or part of his property taxes for the 2013 taxation year.

21In order to qualify under this section of the Act, the Applicant is required to show that every reasonable effort has been made to pay all or part of the taxes. There is an expectation that to qualify for relief under this section of the Act the condition cannot be one where an individual simply cannot make ends meet but amounts to a situation where the Applicant after having called upon every resource available to him and having applied every reasonable means to mitigate and manage his expenditures is left with no means of being able to pay some or all of their property taxes. In the Board’s view the Act envisages that an individual seeking relief on application under s. 323 of the Act should clearly demonstrate that for the year under appeal the Applicant, after scrupulously managing his/her resources and expenditures, was left with no resources available to meet his/her obligations to provide for the basic necessities of living and at the same time pay some or all of his/her property taxes.

22In viewing an application under this section of the Act, the Board not only looks to the income and expenses of the Applicant but also looks at the full spectrum of the Applicant’s expenditures and determine whether there was any opportunity that would allow him/her to mitigate his/her tax obligation.

23The Board has examined the financial information the Applicant filed in the Form 1 – Financial Information and highlights the following:

a. The Applicant stated that he owns two vehicles for which he incurs a monthly operating cost of $585.00. The following is a breakdown of the operating costs for the two vehicles:

• Insurance cost $335 per month.
• Gasoline and repairs and maintenance in the amount of $250 per month.

24The Board is not convinced that the cost of owning and operating two cars was established given that limited resources were available. The Applicant did not provide a reasonable explanation to justify the necessity to maintain two vehicles at a monthly cost of $585 per month given the fact that he is unable to drive due to his medical condition and he spends an addition $84 per month on public transport.

25The Applicant provided information relating to his telecommunication expenses which include a monthly expenditure of $245 for two Cell Phones, a land line telephone, Cable Services and Internet Services. The Board agrees with Counsel for the City who pointed out that this expenditure seems excessive given the fact that the Applicant was fully aware of his property tax obligations well in advance.

26The Board takes note of the observation by the Counsel for the City of Toronto that the cost of groceries appears high. While the Board was advised that the Applicant and his wife have special dietary needs, no details were provided to substantiate the high grocery expenses.

27The Board agrees with the Counsel for the City who states that the payment of property taxes remains one of the foremost obligations of all home owners and having examined the transactions within the various income and expenses statements provided by the Applicant, the Board is not persuaded that the use of funds at the Applicant’s disposal demonstrated sufficient sensitivity to managing his household expenses in order to avoid falling short on his property tax obligation. The nature of some payments listed for various non-essential goods and services does not support expenditures that can be associated with a situation where very limited resources are available to meet the basic necessities of living. The Board agrees with Counsel from the City of Toronto that the monthly property tax payment of approximately $185 per month can be obtained via a more scrupulous management and use of the funds available to the Applicant. For example, the Board is not convinced that monthly expenses such as auto insurance for two vehicles, auto repair, maintenance and gasoline purchases amounting to $585 monthly, telecommunication services (cell phones, land line, cable & internet) amounting to $245 per month are consistent with an individual who has very limited resources. There is an expectation that the payment of property taxes remain one of the highest priorities in the spending pattern of persons seeking to qualify for relief under “sickness or extreme poverty” as envisaged under the Act. The Board finds that this was not the case in this application.

CONCLUSION

28The Board must first determine if “sickness” or “extreme poverty” exists, and secondly, if either is present, the Applicants must demonstrate an inability to pay some or all of the taxes under appeal.

29The Board is satisfied on evidence presented that “sickness” exists and consequently the Board must assess the application on the basis that the Applicant is unable to pay his taxes due to “sickness.”

30Based on the analysis and evidence above, the Board finds that the Applicant (M. M. U.) meets the criteria of “sickness” but finds that there was ample leeway in the spending priorities of the Applicant that could have allowed him to meet his property tax obligation.

31Accordingly, the Board finds that the Applicant has failed to qualify for relief under the City of Toronto Act s. 323.(1)(e) 2006 regarding an inability to pay part or all of his taxes due to “sickness” or “extreme poverty.”

32The Board therefore dismisses the application for the cancellation, reduction or refund of taxes for the taxation year 2013.