Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: August 23, 2019

FILE NO.: WR 161042

Assessed Person(s): J.R. and Z.R.

Applicant(s): J.R.

Respondent(s): City of Toronto

Property Location(s): Withheld

Municipality(ies): City of Toronto

Roll Number(s): Withheld

Appeal Number(s): 3340855

Taxation Year(s): 2018

Hearing Event No.: 712087

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

Heard: June 11, 2019 in Toronto, Ontario

APPEARANCES:

Parties	Counsel⁺/Representative
J.R.	Self-represented
City of Toronto	Graham Thomson⁺ and Melanie Shankar

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1J.R. (the “Applicant”) filed an application to the City of Toronto (the “City”) to have her 2018 taxes reduced, cancelled or refunded because she was unable to pay due either to sickness or extreme poverty, under s. 323(1)(e) of the City of Toronto Act, 2006, S.O. 2006, c.11 Sched A (“Act”).

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

ISSUE

3The issue before the Board is whether or not the Applicant’s 2018 property taxes should be cancelled, reduced or refunded because of the Applicant’s inability to pay due to 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 2018 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 due to 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 did not demonstrate that she was unable to pay the property taxes levied in 2018. The Application is dismissed.

REASONS FOR THE DECISION

Was the Applicant able to pay the Property Taxes levied in 2018?

6The property taxes levied in 2018 were $4,842.56. The Applicant reported a total annual income for 2017 of $22,552, including $1,806 in employment income and $20,746 on CPP benefits and other supplements. Her spouse had an income in 2018 of $3,567. The Applicant and her spouse live at the subject property with their four children. The household also receives various child tax credits and HST/GST refunds from the Government of Canada. The total of these payments in 2018 was $29,338.92 according to bank records submitted at the hearing. The total reported household monthly income plus tax credits and refunds was $4,621.49.

7The Applicant reported that monthly financial activity for the household is transacted through a single checking account held by her and her spouse. The balance on that account on April 30, 2018 (the first date in evidence) was $7,591.20. The balance on December 31, 2018 was $7,468.58.

8The Applicant testified that the subject property has a value of approximately $600,000 and that the family has two cars; a 2013 Infiniti QX60i and a 2012 Mazda 3 with a combined estimated value of $19,000. The family has no other tangible assets.

9Monthly expenses reported by the Applicant for 2018 totaled approximately $6,362 per month. These expenses are summarized as follows (all rounded to the nearest dollar):

• Mortgage payments - $1,790
• House and auto Insurance - $392
• Groceries - $600.00
• Meals outside the home - $400.00
• Household supplies - $200
• Clothing - $400
• Utilities (heat, hydro water and sewer) - $215
• Car expenses - $500
• Cell phone, telephone, cable and internet - $271
• Medical expenses not otherwise covered - $142
• Recreation / Entertainment - $400
• Mexico Vacation - $359
• Property taxes - $404

10The Applicant reported financial liabilities in 2016 in the form of the outstanding mortgage of approximately $522,000.

11The Applicant submitted that she and her family had a difficult time meeting their obligations in 2018 and that a refund of the taxes paid would allow them to improve their standard of living.

The City’s Submissions

12The City submitted that the evidence before the Board strongly suggested that the Applicant was able to pay her property taxes in 2018, adding that expenses related to a family vacation, a first communion celebration and a catch-all estimate of $400 per month for ‘recreation and entertainment’ are not the kinds of expenses that a taxpayer would incur if he or she were concerned about meeting other, essential costs including property taxes.

13The City noted that the monthly expenses include $404 for the payment of property taxes, and that the property tax account in the City’s records indicated a balance owing of zero for the 2018 taxation year.

14Because the 2018 property taxes were fully paid and that there are monthly funds available each month in the household finances, including a closing year end bank balance of more than $7,000, the City submitted that the Applicant has proven she was able to pay her property taxes in 2018 and therefore is not eligible for a refund, cancellation or reduction of those taxes.

The Board’s Analysis

15The Applicant’s monthly family income is approximately $1,600 per month more than her declared monthly expenses. 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.

16Monthly finances are not the only measure used by the Board to determine if an applicant was able to pay property taxes. The Board also undertakes a contextual analysis of an applicant’s total financial picture to determine an inability to pay. The Board regularly reviews overall financial conditions, including mortgage and other debts owing, credit card debt and other loans or commitments, and the basic living conditions of the applicants.

17In this case, the Applicant testified that there are no outstanding car loans or credit card debts. The mortgage balance at the end of 2018 was $522,000. The household operates two cars for their transportation needs at a significant monthly cost.

18There are multiple payments made from the Applicant’s chequing account to a Mastercard account. The Board received no documents as to what these charges were for, or who incurred them.

19Regarding the activity on the Applicant’s Visa credit card, the Board notes that significant charges were incurred over the course of 2018. As the City has pointed out, many of these are for expenses, that relate to non-essential activities or costs. The Visa card records filed by the Applicant are not complete (only 10 of 12 months are in evidence) but they do illustrate the presence of another form of income. The Applicant testified that, from time to time, her father would advance funds to cover certain expenses when she was unable to pay them. In 2018, payments to the Visa card alone totaled nearly $40,000. As these payments covered many essential household expenses that had been charged to the Visa, the Board must take that into account on the income side of the ledger.

20This family is meeting its obligations related to costs of necessities. It is also meeting a range of other costs and expenses that the Board considers non-essential to meet the necessities of life for the six family members. These monthly costs are summarized as follows:

• Expenses related to a second automobile (fuel, maintenance and insurance): $ 445
• Expenses incurred related to family vacations in Mexico and Niagara Falls: $ 359
• Expenses as reported for meals out of the home, entertainment and recreation: $ 800

21When these non-essential expenses are excluded from the calculation of total monthly expenses, the total household income (excluding income form the Applicant’s father) is approximately $100 short of the total monthly expenses to provide for basic food, clothing, shelter, transportation, communication and property taxes. This represents an annual shortfall of some $1,200, which would easily be covered by the balance in the chequing account that exceeds $7,000 after the taxes were paid.

22For these reasons, the Board finds that the Applicant has failed to demonstrate that she was unable to pay the property taxes levied in 2018. The application is, therefore, dismissed.