Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 22, 2020

FILE NO.: WR 166051

Assessed Person(s): J.E.

Applicant(s): J.E.

Respondent(s): City of Kawartha Lakes

Property Location(s): Address withheld

Municipality(ies): City of Kawartha Lakes

Roll Number(s): Roll Number withheld

Appeal Number(s): 3369761

Taxation Year(s): 2019

Hearing Event No.: 733485

Legislative Authority: Section 357(1)(d.1) of the Municipal Act, 2001, S.O. 2001, c. 25

APPEARANCES:

Parties / Representative

J.E. / Self-represented

City of Kawartha Lakes / Linda Liotti

HEARD: September 8, 2020 by telephone conference call

ADJUDICATOR(S)

Dan Weagant, Member

DECISION

OVERVIEW

1J.E. (the “Applicant”) filed an application to the City of Kawartha Lakes (“City”) to have her 2019 taxes reduced, cancelled or refunded because she was unable to pay due either to sickness or extreme poverty, under s. 357(1)(d.1) of the Municipal Act, 2001, S.O. 2001, c. 25 as amended (“Act”).

2The City has passed a by-law, delegating its authority to determine such applications to the Assessment Review Board (“Board”) under s. 357(11) of the Act.

Issues for the Hearing

3The main issue before the Board is whether the Applicant’s 2019 property taxes should be cancelled, reduced or refunded due to her inability to pay because of sickness or extreme poverty. This requires the Board to determine:

1. if the Applicant was unable to pay her 2019 property taxes; and
2. 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.

4Finally, if the Board determines that she was unable to pay because of sickness or extreme poverty, the Board must then decide on the amount of the property taxes levied in 2019 to be cancelled, reduced or refunded.

Result

5The Board finds that the Applicant has demonstrated that she was unable to pay the property taxes levied in 2019. The Board also finds that she was unable to pay because of extreme poverty. Accordingly, for the 2019 taxation year, $765 of the property taxes levied are cancelled and $876 of the property taxes levied are refunded.

ANALYSIS

Issue 1 – Ability to Pay

6The Applicant’s income for 2019 was supported by T4 slips and bank records from 2020. She testified that her income for 2019 was very close to her 2020 income and that given the circumstances, she believed the most up to date information would be the most relevant. The documents provided indicate a total income from all sources for 2020 of approximately $2,378 per month. This income is derived from Ontario Disability Support Program (“ODSP”) deposits and cash payments from customers for whom the Applicant provided various cleaning services and other odd jobs.

7Monthly expenses reported by the Applicant for 2019 totaled approximately $2,451. These expenses are summarized as follows (all rounded to the nearest dollar):

a) Insurance: $180 b) Groceries and household supplies and clothing: $540 c) Car expenses: $266 d) Property tax account payments: $274 e) Scotia Bank 1st Mortgage: $420 f) Private lender 2nd mortgage: $332 g) Heating oil: $60 h) Hydro One: $379

8Payments made in 2019 on the property tax account included arrears, penalties and interest along with a partial payment of the 2019 property tax levy of $1,780.50. Payments to Hydro One included arrears payments and monthly consumption. The Applicant did not testify to any other financial liabilities or assets.

9The City did not take a position on whether the Applicant was unable to pay property taxes, as the City has delegated its authority on that decision to the Board. The City took no issue with the Applicant’s testimony or documentary evidence.

10The City noted that it had taken what it believed to be reasonable steps in providing the Applicant with various programs to assist in mitigating the impact of property taxes on the Applicant’s finances. The City submitted that it had offered a payment plan option that included the reduction of interest and penalties and that this option was rejected by the Applicant.

11Using the best financial evidence available at the hearing, the monthly income as reported is approximately $73 less that the total monthly expenses incurred by the Applicant in 2019, or at total shortfall of $876. It should be noted that the Applicant took significant steps in 2019 to get her finances in order. Most notably she secured a second mortgage that provided an advance of enough funds to bring her tax arrears more up to date and to address a range of consumer and utility debts that she had incurred owing to her low income.

12The result of this refinancing was a payment against the property tax account of $3,287.95 in 2019 which covered all but $765 of the 2019 property tax levy. The Applicant showed no cash on hand from the refinancing, testifying that she refinanced only to consolidate the debts she had incurred.

13The subject property is assessed at $180,000. The first and second mortgages combined reflect a $142,000 charge against the subject property.

14The Board finds the Applicant’s submissions to be strong evidence that she was unable to pay all the property taxes levied in 2019. While payments were made, they were made with money the Applicant had to borrow.

Issue 2 - The reason for the inability to pay

15The Board finds the evidence at hearing supports that the Applicant was living in a state of extreme poverty. Her income in 2019 was demonstrably below the total of her expenses, and as demonstrated by the mortgage documents she submitted, she is slipping further and further into debt as time passes.

Issue 3 - The amount of the cancellation, reduction or refund of taxes

16At the end of the 2019 taxation year, a total of $765 remained on the Applicant’s annual property tax levy for that year. The Board orders that this $765 remaining in taxes levied for 2019, still on account, is cancelled. The Board also orders that the City refund the taxes paid in 2019 in the amount of $876; the amount of the Applicant’s financial shortfall during the 2019 taxation year, being calculated as 12 months x $73.

CONCLUSION AND ORDER

17The Board finds that the Applicant was unable to fully pay her property taxes in 2019. The Board also finds that the Applicant is unable to pay due to extreme poverty.

18The Board orders as follows:

1. $765 of the total property taxes levied in 2019 is cancelled; and
2. $876 of the total property taxes levied in 2019 is to be refunded to the Applicant by the City of Kawartha Lakes.