Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: May 10, 2016

FILE NO.: WR 137737

Assessed Person(s): A. P.

Applicant(s): A. P.

Respondent(s): City of Toronto

Property Location(s): Withheld

Municipality(ies): City of Toronto

Roll Number(s): Withheld

Applicant Number(s): 3049889

Taxation Year(s): 2014

Hearing Event No. 580964

Legislative Authority: Section 323.(1)(e) of the City of Toronto Act, 2006, S.O. 2006 c. 11, Sched. A

Heard: May 15, 2015 in Toronto, Ontario

APPEARANCES:

Parties Counsel+/Representative

A. P. Self-represented

City of Toronto C. Tanner+ and C. Theodardis

MEMORANDUM OF ORAL DECISION DELIVERED BY BARBARA KOWARSKY AND SUBUOLA AWOLERI ON MAY 15, 2015

INTRODUCTION

1This matter came before the Assessment Review Board (“Board”) on May 15, 2015. An oral decision was rendered by the panel at that time. Subsequently, the Applicant requested that decision in writing.

2Rule 128 of the Board’s Rules of Practice and Procedure (“Rules”) requires that a request for written reasons must be made within 14 days of the end of the hearing. However, the Board has the discretion to grant this request if circumstances are present to extend the deadline. Such is the situation in this case.

ISSUE

3The issue before the Board is to determine whether the Applicant’s property taxes for the taxation year 2014 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, 2006 (“Act”) s. 323.(1)(e).

DECISION

4The Board finds that the Applicant qualifies for a reduction and that a tax refund of $329.10 is in order.

REASONS FOR DECISION

5The Act s. 323.(1) 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.

6Hence, a two part test must be applied. First, 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

7In Exhibit 1 (Form 2 – Doctor’s Statement) is a copy of a letter from Dr. R. L. Zatzman which was submitted by the Applicant to the City. The letter states that the Applicant, A. P., suffers from “extreme fatigue/lack of energy due to hepatitis C/liver cirrhosis and has not been employable since 2005.”

Extreme Poverty

8In addition to a finding of sickness, the Board must also assess the application on the basis of the Applicant’s inability to pay his taxes due to “extreme poverty.”

9In 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. The Board must analyze the overall financial situation (including, but not limited to, expenses and income) of the Applicant. After considering and assessing all the evidence and factors, the Board must determine whether the Applicant was in a situation which prevented him/her from meeting all or part of his/her tax obligation.

Document Disclosure

10The Applicant filed a completed “Form 1 – Financial Information” which shows the various sources of income and the application of the income to the various categories of expenses incurred.

11His only source of income is Ontario Works and the Ontario Disability Support Program (“ODSP”) which was $1,284.21 per month in 2014. In addition, he borrows money from his only child, from time to time.

12His listed expenses (which include a tax rebate and a ‘low income rebate’ on his hydro bill), indicate a total monthly expenditure of $1,898. This results in a deficit of $613.79 monthly, or $7,365.48 annually. In addition to these expenses, his son lent him $183,650, and in November, 2005, A. P. started repaying this debt at a rate of $450 per month. This loan is secured by a mortgage on the house in favour of his son. He has re-paid $48,600, is in arrears three to four payments, and the outstanding debt is $135,050.

13A. P. testified that he lives in a detached house. The basement is unfinished, there is no separate entrance, and therefore finishing the basement with the goal of renting it, is not feasible. Furthermore, any rent would be deducted from his ODSB allowance and therefore his ‘situation’ would not change.

14The house is valued at $507,000 and he has $220 in his chequing account. If he were to sell the house, he would be required to use the proceeds, and only then would he be eligible to re-apply for government benefits. His health prevents him from generating any other income.

15The Applicant is requesting that his taxes be cancelled.

16The representatives for the City oppose the application. The City’s summary of documents is included in Exhibit 2.

17Ms. Tanner, Counsel for the City, cited a previous decision of the Board in which the sitting member suggested a “full spectrum of possibilities” available to the Applicant on which he could rely for the finances to pay the taxes.

18The City’s position is that the Applicant received a tax rebate, that he has equity in the home, and that since the registered documentation shows that the mortgage is in favour of his only child, whether he repays his son or not, his son is his only beneficiary.

Analysis

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

20The 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 determine whether the Applicant’s sickness adversely affected his ability to pay all or part of his property taxes for the 2014 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 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 the 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.

22The Board agrees with the City that when taxes are cancelled, the obligation is then shifted to all other taxpayers, and that since A. P. has equity in his property, he is responsible for paying taxes, which he has been doing.

23A prior decision of the Board is based on evidence that was before that Board at the time. This Board’s view is also that the threshold of extreme poverty must be a demonstrably and significantly much higher threshold than that which is generally accepted for persons living in a state of poverty in society. The Board must base its decision on the evidence presented at this hearing.

24The Board is satisfied with the testimony in respect to the financial implications of not finishing the basement and renting it out in order to generate income.

25A. P.’s son holds the mortgage, but the Board has no evidence that he is demanding payment, nor that just because he is an only child, that he would necessarily be the sole beneficiary of his father’s estate. From the evidence before the Board, the son’s only claim is for the balance due on the mortgage. A. P. testified that his monthly mortgage payments are in arrears but there is no evidence that such arrears are likely to lead to foreclosure any time soon.

CONCLUSION

26The Board must first determine if “sickness” or “extreme poverty” exists, and secondly, if either is present, the Applicant must demonstrate an inability to pay some or all of the taxes under appeal.

27The Board is satisfied that “sickness” exists and consequently the Board must assess the application based on the Applicant’s inability to pay taxes due to “sickness”.

28Based on the analysis and the evidence, the Board finds that the Applicant meets the criteria of “sickness”, and that although he received both a tax rebate and qualifies for a low income hydro rebate, he has demonstrated that he was able to pay his taxes despite being in deficit monthly. Based on the totality of the evidence and findings the Board determines that a further reduction of $329.10 as relief under the City of Toronto Act, 2006, s. 323.(1)(e) resulting from the Applicant’s inability to pay part or all of his taxes due to “sickness” or extreme poverty” is in order.