W.W. v. City of Toronto, 2024 CanLII 24828

Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: March 22, 2024

FILE NO.: WR 2024M01

Assessed Person(s): W.A.W.

Applicant(s): W.W.

Respondent(s): City of Toronto

Property Location(s): Address Withheld

Municipality(ies): City of Toronto

Roll Number(s): Roll Number Withheld

Application Number(s): 3514357

Taxation Year(s): 2022

Hearing Event No.: 781272

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

Parties

Representative/Counsel*

W.A.W.

Self-represented

City of Toronto

Laura Nyman*

HEARD: August 31, 2023, by telephone conference call

ADJUDICATOR(S): Dan Weagant, Member

DECISION

OVERVIEW

1Section 323, subsection (1) of the City of Toronto Act (the “Act”) permits the City of Toronto (the “City”) to cancel, reduce or refund all or part of the taxes levied on a property in a given taxation year, for a list of reasons.

2W.W. (the “Applicant”) filed an application with the City to have her 2022 property taxes cancelled, reduced or refunded because she was unable to pay, due to either sickness or extreme poverty, as provided for in subsection (1)(e) of the Act.

3The 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.

Issues for the Hearing

4At issue in this proceeding is whether the Applicant’s 2022 property taxes should be cancelled, reduced or refunded because of her inability to pay, due to sickness or extreme poverty. This requires the Board to determine:

1. if the Applicant was unable to pay her 2022 property taxes;
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; and
3. if the Board determines she was unable to pay due to sickness or extreme poverty, the Board must then decide the amount of the property taxes levied in 2022 to be cancelled, reduced or refunded.

Result

5The Board finds that the Applicant demonstrated that she was unable to pay a portion of the property taxes levied in 2022. The property taxes levied in 2022 are reduced by $547.80.

ANALYSIS

Issue 1 – Was the Applicant able to pay her property taxes in 2022?

6The Applicant submitted the following documents in support of the application:

1. correspondence from the Applicant explaining her employment and expense difficulties in 2022;
2. monthly bank account statements for 2022;
3. a copy of the City’s “Financial Information Form,” fully completed;
4. credit card statements for 2022;
5. utility and mortgage statements;
6. records and sources of income for 2022;
7. income and expense summary of self-employment in 2022; and
8. Canada Revenue Agency Notice of Assessment for 2022.

7The City submitted that the application should be dismissed, because:

1. Costs incurred by the Applicant included discretionary expenses that were not required to meet the basics of living. These expenditures included purchases at the LCBO, regular travel expenses to another City in Ontario, meals paid for outside the home at restaurants and professional fees / dues and insurance related to two separate professional organizations. The City further submitted that these discretionary expenses impacted the Applicant’s ability to pay the taxes which is a foremost obligation of property owners in Ontario.
2. The Applicant has total assets of $607,294 and total liabilities of $351,973.15 indicating a net positive balance of $255,321 which could have been drawn upon to meet her property tax obligations.

8The property taxes levied in 2022 totalled $2,243.36. No tax payments were made in 2022.

9The Applicant testified that in 2022 she was still responding to business disruptions resulting from the COVID-19 pandemic. The professional association regulating the majority of her work restricted its members in their practice until mid-2022. She indicated that it was necessary for her to travel outside the City to carry out her practice and when she did so she stayed with family.

10The Applicant submitted that her income in 2022 totalled $2,149.97 per month. The source of the income is as follows:

• CERB: $247.50
• Professional Services: $850.48
• Rental Income: $955.42
• Ontario and Canada tax credits / rebates: $96.57

11The Applicant’s expense summary indicated the following monthly costs:

• Condominium fees: $499
• Utilities: $67.51
• Insurance premiums: $62.10
• Credit card interest payments: $340.97
• Mortgage payments: $1,146.51
• Internet and telephone: $78.87
• Car expenses: $283.35
• Groceries and household supplies / clothing: $348.22
• Property taxes: $186.90
• Professional fees, insurance and business expenses: $360

12Monthly expenses submitted by the Applicant total $3,373.43.

13The Applicant’s documentary evidence indicates that she had a bank balance on January 1, 2022 of $2,876.89. That balance was $1,695.56 on December 31, 2022.

14In addition to monthly expenses, the Applicant had the following debts in 2022:

• Credit card debt: $27,547
• Mortgage: $308,526
• Personal loans and gifts from family and friends: $15,900

Findings on Issue 1

15The Board must first determine if the Applicant was able to pay her property taxes, based on the evidence available at the hearing. In order to make a finding on the Applicant’s ability or inability to pay the taxes levied in 2022, the Board requires a clear accounting of the Applicant’s income and expenses.

16From these documents, the Board finds that after all disclosed expenses were paid, including interest payments on outstanding credit card debt, and all reasonable expenses to meet the necessities of living, the Applicant had $1,695.56 left over and available for the payment of taxes at the end of 2022. As submitted by the City, the payment of property tax is a fundamental responsibility of property owners in Ontario. This Board has frequently held that when funds are left over, after the necessities of living are accounted for, those funds must be used to pay property taxes. The City cited several past decisions in its submissions, including M.M.U. v Toronto (City), 2015 CanLII 46826 (ON ARB) (“M.M.U.”), where the Board held that an applicant seeking relief from property taxes on compassionate grounds is required to show that “every reasonable effort has been made to pay all or part of the taxes” and that the Applicant’s use of available funds “demonstrated sufficient sensitivity to managing (their) household expenses in order to avoid falling short on (their) property tax obligation.”

17The Board finds that M.M.U. is on point in this case.

18The Board finds therefore, that the Applicant has failed to demonstrate that she was unable to pay all of the property taxes levied in 2022 and that the funds remaining in her account at the end of 2022 should have gone to paying a portion of the property taxes. The Board finds that when the available funds of $1,695.56 are applied to the taxes levied in 2022 of $2,243.36 the Applicant was unable to pay the balance of $547.80.

Issue 2 – What was the reason for the Applicant’s inability to pay a portion of the taxes levied in 2022?

19Having determined that the Applicant was unable to pay a portion of the taxes levied in 2022, the Board must determine the reason for that inability to pay. In order for the application to be successful, the two reasons set out in the Act are sickness or extreme poverty.

20In this case there is no evidence that the Applicant was experiencing sickness. Therefore, the only question before the Board on this issue is whether the Applicant was in a state of extreme poverty. This term is not defined in the Act. The Board’s determination on this issue depends on the specific financial circumstances experienced by the Applicant in 2022.

21In 2022 the Applicant experienced a disruption in the normal course of her self-employment income resulting from residual effects of the COVID-19 pandemic, including a directive from her professional association that prohibited certain methods of service to her clients. This required her to draw on loans and gifts from friends and family to meet ongoing living expenses. The income indicated in the documents adduced by the Applicant clearly showed a monthly shortfall when reasonable monthly expenses are considered. The City did not refute the accounting provided by the Applicant.

22With respect to the net financial standing submitted by the City of over $200,000, the Applicant testified that she had been turned down by multiple financial service providers in her effort to draw on the equity represented in the value of the subject property.

23The Board is satisfied that in this case, for the 2022 taxation year, the Applicant’s situation meets the test of extreme poverty as her income was insufficient to meet the full obligation of the property taxes.

ORDER

24The Board finds that the Applicant was unable to pay the taxes levied in full in 2022. The property tax levied for the 2022 taxation year is reduced by $547.80.

"Dan Weagant"

DAN WEAGANT

MEMBER

Assessment Review Board

Website: www.tribunalsontario.ca/arb