G.K. v. City of Toronto, 2020 CanLII 103260

Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

December 15, 2020

FILE NO.:

WR 166793

Assessed Person (s):

G.K.

Appellant(s):

G.K.

Respondent(s):

City of Toronto

Property Location(s):

Address withheld

Municipality(ies):

City of Toronto

Roll Number(s):

Roll number withheld

Appeal Number(s):

3392774

Taxation Year(s):

2019

Hearing Event No.:

733285

Legislative Authority:

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

Parties

Counsel*/Representative

G.K.

Self-represented

City of Toronto

Jennifer Boyczuk*, Selena Mynttinen

HEARD:

October 22, 2020 by telephone conference call

ADJUDICATOR(S):

Subuola Awoleri, Member

DECISION

OVERVIEW

1G.K. (the “Applicant”) filed an application to the City of Toronto (the “City”) to have her 2019 property taxes reduced, cancelled or refunded because she was unable to pay these taxes due to either sickness or extreme poverty under s. 323(1)(e) of the City of Toronto Act, 2006, S.O. 2006, c. 11. Sched. A (the “Act”). The City passed a by-law delegating its authority to determine such applications to the Assessment Review Board (the “Board”).

2The Subject Property is a condominium townhouse built in 1975. It has three bedrooms, one bathroom and one parking unit. The property taxes levied on the Subject Property in the 2019 taxation year was $680.86, and the Applicant is requesting a cancellation of this amount.

3At the completion of the hearing, the Board provided an oral decision. The Applicant thereafter requested written reasons.

ISSUE

4The Board must determine if all or part of the Applicant’s 2019 property taxes should be cancelled as a result of the Applicant’s inability to pay due to sickness or extreme poverty. In order to make this determination, the Board must determine:

a) if the Applicant was unable to pay all or part of her property taxes;

b) if the Board finds that she was unable to pay all or part of her property taxes, the Board must determine if the inability to pay was due to either sickness or extreme poverty.

Result

5The Board finds that the Applicant was able to pay all her 2019 property taxes.

6The Board determines that this Application does not qualify for relief and dismisses the Applicant’s application for cancellation of property taxes for the 2019 taxation year.

ANALYSIS

Ability to Pay

7A determination by the Board of the Applicant’s ability to pay her property taxes requires a contextual analysis of the Applicant’s income and expenses and an examination of all financial resources available to her in 2019. This will be used to determine if she could have mitigated her property tax obligation.

Income

8The Applicant is 50 years old. Her source of income is the Ontario Disability Support Program and GST/HST paid by the government of Ontario. The Applicant’s monthly income is $1,497.63.

Expenses

9The Applicant’s monthly expenses in 2019 was $1,594.29. This provides a net income of (-$96.66).

Assets and Liabilities

10Selena Mynttinen, a Revenue Analyst with the City testified that the fair market value of the Subject Property is $196,000, based on the 2019 sales of comparable properties in the same building as the Subject Property. The assessed value provided by Municipal Property Assessment Corporation (“MPAC”) is $111,000. If the Applicant sold the Subject Property in 2019, the sale price would be dependent on the sales of comparable sales within the same vicinity as the Subject Property, which the City provided as $196,000.

11The City submits that the balance in the Applicant’s bank account as of December 2019, an average of $979.82, should be included as part of the Applicant’s asset, as this could have been used to pay her property taxes. The Applicant disagrees with the City, arguing that this amount has already been calculated as part of her income. In A.P. v. Toronto (City), [2018] O.A.R.B.D. No. 150 at paragraph 24, the applicant had a surplus each month excluding three months and a surplus at the end of the year under review as revealed in his bank statements. The Board determined that the applicant could have leveraged on his closing balance to pay his monthly property taxes. In this Application, the Applicant’s monthly bank account statement does not reveal a deficit in the opening and closing balance. The average closing balance is $979.82. The Board finds that this amount should be added to the Applicant’s asset, as it could have been used to pay her property taxes. Notwithstanding, as will be determined in this decision, even if this amount is not included as part of the Applicant’s asset, the Applicant will still have the ability to pay all her 2019 property taxes.

12The Applicant’s financial statement is summarized in Table 1 below:

Table 1

Income

$1,497.63

Expenses

$1,594.29

Net Income

(-$96.66)

Assets/Liabilities

Amount ($)

Assets

Home (Assessed Value from MPAC)

196,000.00

TFSA

177.53

Bank Account Average balance (RBC)

979.82

Total Asset

197,157.35

Liabilities

Mortgage

44,832.04

Credit Card (RBC Visa)

34,996.02

Line of Credit (Scotia Bank)

27,457.38

Water Bill

9,695.89

Total Liabilities

116,981.33

Net Asset (Total Assets Less Liabilities)

80,176.02

13The fact that an Applicant has a deficit monthly net income does not automatically entitle the Applicant to a relief. In E.B. v. Toronto (City) [2016] O.A.R.B.D. No. 142, (“E.B.”) the applicant who was 81 years old and diagnosed with various illnesses applied for relief from paying her property taxes due to sickness. Her net monthly income was a deficit. The applicant’s only asset was her home. The Board determined that she had not explored other financial resources available to her in mitigating her property tax obligation. Therefore, the Board concluded that she was not entitled to the relief.

14In the Applicant’s circumstances, she testified that she has an investment in the form of a Tax-Free Savings Account (“TFSA”), and as of December 31, 2019, it had a balance of $177.53. This could have been leveraged to mitigate her property tax obligation.

15Furthermore, the Applicant has a line of credit (“LOC”) which had an available credit of $10,942 as of December 2019. The Applicant testified that she used the funds in her LOC and credit card to pay approximately $13,700 as legal fees to her lawyer for a dispute against her condominium corporation. The Applicant acknowledged that the legal fees were not necessary, but the dispute with her condominium corporation was affecting her health. Jennifer Boyczuk, counsel for the City, submits that this is not a basic necessity and should not take precedence over the Applicant’s property tax obligation.

16The Board agrees with the City. In E.B., the Board determined at paragraph 19 that “… these applications are of last resort and the Applicant must have depleted all resources before making such an application.” Furthermore in S.C. v. Whitby (Town), [2016] O.A.R.B.D. No. 55 at paragraph 37, the Board determined that:

…for individuals who claim an inability to pay their property taxes because of sickness cannot simply be that the individuals are unable to make ends meet. The individuals must demonstrate that after having called upon every resource available to them and having explored every reasonable opportunity to mitigate their financial stresses, they have no means of being able to pay some or all of their property taxes.

17The Applicant did not leverage on the financial resources available to her to mitigate her property tax obligation. If the Applicant had leveraged on the balance in her TFSA to pay part of her property taxes, she would be left with a balance of $503.33. This provides a monthly payment of $41.94. Based on the Applicant’s use of the LOC, she was able to pay all her 2019 property taxes.

Outstanding Property Taxes / Board’s Jurisdiction

18Under s. 325 (1)(e) of the Act, the Board’s statutory jurisdiction is limited to property taxes levied in the year under review (emphasis added) excluding water bills, interest and fees.

19Section 325(1) (e) provides:

Upon application to the city treasurer made in accordance with this section, the City may cancel, reduce or refund all or part of taxes levied on land in the year in respect of which the application is made if,

(e) the applicant is unable to pay taxes because of sickness or extreme poverty;

20The Applicant testified that her condominium corporation’s public utility bill with the City was in arrears. The public utility services provided by the City to the condominium corporation were in the form of water, sewage treatment and solid waste collection. The City had sent the condominium corporation several letters of demand requesting for payment of the outstanding bill. Despite the repeated demands, the public utility bill remained outstanding. Consequently, the City billed the proportionate share of the public utility bill to each unit owner, including the Applicant, by adding the water bill to the Applicant’s property tax account. In 2017, the City added the amount of $7,764 to the Applicant’s property tax account. This amount accrued interest and fees to the sum of $9,695.89.

21The Applicant testified that she has sued her condominium corporation for this unpaid water bill. This matter is yet to be decided in court, and has been delayed due to the effect of COVID-19.

22The Applicant testified that she has paid her 2019 property taxes. Ms. Mynttinen testified that the payments made by the Applicant was applied towards the outstanding property taxes for prior years, therefore the 2019 property taxes are still outstanding.

23As a result of the outstanding water bill from prior years, even if the Board issued an order cancelling the 2019 property taxes by $680.86, the Applicant would still be faced with an outstanding property tax bill because the City would apply this reduction to the outstanding amount from prior years.

24Part of the issue in this Application is the outstanding amount owed to the City from prior years, which includes the water bill on top of the property tax account. The Board does not have jurisdiction over the water bill. The year under review in this Application is 2019, and the Board also does not have jurisdiction over the outstanding property taxes from prior years. The Applicant has contacted the appropriate forum: the court, to address the issue of the water bill.

CONCLUSION

25The Board determines that the Applicant was able to pay all her 2019 property taxes, therefore, the Board does not need to consider the second sub-issue; which is the Applicant’s sickness.

ORDER

26The Board dismisses this Application for the 2019 taxation year.