A.D. v. City of Toronto, 2019 CanLII 7186

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 31, 2019

FILE NO.: WR 155142

Assessed Person(s): A.D.

Appellant(s): A.D.

Respondent(s): City of Toronto

Property Location(s): Withheld

Municipality(ies): Toronto

Roll Number(s): Withheld

Application Number(s): 3288423

Taxation Year(s): 2017

Hearing Event No.: 702078

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

Heard: August 24, 2018 in Toronto, Ontario

APPEARANCES:

Parties

Counsel⁺/Representative

A.D.

Self-represented

City of Toronto

J. Boyczuk⁺

Luis Verastegui

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1A.D. (the “Applicant”) filed an application to the City of Toronto (the “City”) to have her 2017 taxes cancelled, reduced or refunded because she was unable to pay due to sickness or extreme poverty, under s. 323(1)(e) of the City of Toronto Act (“Act”).

2The City has passed a by-law, delegating its authority to determine such applications to the Assessment Review Board (the “Board”) under s. 323(11) of the Act.

ISSUE

3The issue before the Board is whether or not the Applicant’s 2017 property taxes should be cancelled, reduced or refunded because of the Applicant’s inability to pay for the reason of sickness or extreme poverty. This requires the Board to determine a number of things. First the Board must determine, based on the evidence at the hearing, if the Applicant was unable to pay her 2017 property taxes. If the Board determines she was unable to pay her property taxes, the Board must then determine if the reason she was unable to pay was either sickness or extreme poverty.

4If the Board determines that the reason she was unable to pay was sickness or extreme poverty, the Board must then decide on the amount of the taxes levied to be cancelled, reduced or refunded.

DECISION

5The Board finds that the Applicant was unable to pay part of the property taxes levied in 2017 due to extreme poverty.

6The Board finds that the amount to be refunded is $702.67.

REASONS FOR THE DECISION

Was the Applicant able to pay the Property Taxes levied in 2017?

7For 2017, the Applicant reported a total monthly income of $1,224 (rounded). The total is made up of $1,170.83 in the form of ODSP payments and a monthly average of $53.08 from self-employment income.

8The Applicant reported that monthly financial activity for the household is transacted through a single checking account. The balance on that account on January 1, 2017 was $89.06. The balance on December 31, 2017 was $1,234.84.

9The Applicant testified that the subject property has a value of approximately $347,000. The subject property has a mortgage, with a principal balance on December 29, 2017 of $213,849.32. In 2017 she also held an RRSP account with a balance of $1,635.66. Contributions were made to that account in 2017 of $1,593.25. The Applicant reported no other assets.

10Monthly expenses reported by the Applicant for 2017 totaled approximately $2,631 per month. These expenses are summarized as follows (all rounded to the nearest dollar):

• Mortgage payments - $977;

• Condominium fees - $672;

• Groceries and household supplies and clothing - $390;

• Transit Expenses - $146;

• Cell phone, telephone, cable and internet - $164;

• Credit card, Line of Credit Interest - $91; and

• Property taxes - $191.

11The Applicant reported that she had financial liabilities in 2017. These additional liabilities include:

• Two Personal Lines of Credit - $13,125.28; and

• Visa credit card - $951.55.

12The Applicant submitted that she had a difficult time meeting her obligations in 2017 and that a refund of the taxes paid would allow her to improve her standard of living.

The City’s Submissions

13The City submitted that the evidence before the Board strongly suggested that the Applicant not only was able to pay her property taxes in 2017, she proved it by paying them, noting the tax account for the subject property has a balance of $0 at the time of the hearing. The taxes levied for the 2017 taxation year were $2,295.92.

14The City submitted that the monthly expenses also include approximately $90 per month for the purchase of clothing. It disputes the Applicant’s claim for full refund of the taxes, in part because it believes the clothing costs can be considered, at least partially, discretionary in nature and that some of this +/- $1,080 per year could have been directed to the partial payment of taxes.

15Because the account was fully paid, the City submitted that the Applicant has proven she was able to pay her property taxes in 2017 and therefore is not eligible for a cancellation, reduction or refund of those taxes.

The Board’s Analysis

16A number of salient facts are clear in this case from the evidence submitted. Firstly, the monthly expenses, as compared to the monthly income, are higher by an amount of $1,387. The comparison of monthly income and expense is a common measure used by the Board to calculate if basic household needs can be met, prior to determining if an Applicant can meet the property tax obligation.

17Monthly finances are not the only measure used by the Board to determine if an Applicant was able to pay property taxes. The Board regularly reviews overall financial conditions, including mortgage and other debts owing, credit card debt, and other loans or commitments. The Board also considers any assets held by the Applicant.

18The City acknowledged that the application has some merit given the overall financial challenges faced by the Applicant, but asserted that she would have been able to make some payment without significant financial hardship by applying some of her discretionary spending toward the taxes. The City submitted that the Applicant had funds available but that those funds were spent on discretionary expenditures like clothing.

19The Board rejects this assertion by the City. The Applicant testified that her illness since 2010 has caused weight loss that continues. She is forced to spend more than she would otherwise on clothing as a result. Secondly, an annual total of $1,080, or thereabouts, seems reasonable to the Board for such an expense.

20The City’s assertion ignores that the Applicant demonstrated a monthly shortfall of nearly $1,200 per month, before the property tax payments are accounted for. Any amount ‘transferred’ from discretionary spending to taxes as described by the City would be inconsequential to the Applicant’s overall state of financial affairs.

21The Applicant testified that monthly shortfalls are made up through gifts and loans from friends and family overseas. She provided no accounting for these amounts, however the bank account activity clearly shows deposits from other sources.

22While this was of assistance to the Applicant for the 2017 taxation year, it is not a sustainable long term solution. The Applicant testified that she is optimistic about her future prospects for employment and hopes that she will no longer be reliant on these monthly gifts and loans.

23The Board finds that the Applicant demonstrated that she was unable to pay at least a portion of the property taxes in 2017.

Was the Applicant unable to pay property taxes because of sickness or extreme poverty?

24The monthly shortfall clearly demonstrates that the Applicant was in a condition of extreme poverty in 2017. However, through means of monetary contributions from family, she was able to contribute $1,593.25 to an RRSP. This account was opened in 2017. The Board finds that this amount was available for the payment of taxes. Contributions to registered savings plans cannot be considered expenses toward meeting the necessities of life, even in a modern world.

25The Board finds that, despite the Applicant’s demonstrated financial hardship, she was able to pay $1,593.25 toward her taxes, that she chose to put toward her own financial benefit.

What is the amount of the taxes to be reduced refunded or cancelled?

26The property tax levied in 2017 was $2,295.92. When the value of the RRSP contribution is deducted from this amount, the result is $702.67.

27The 2017 property taxes are refunded in the amount of $702.67.