Court File and Parties

COURT FILE NO.: CV-20-1902 DATE: 20240822 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

W.L.K. SENIORS ASSISTANCE ASSOCIATION INC. Applicant

– and –

MUNICIPAL PROPERTY ASSESSMENT CORPORATION (NO. 23) and THE CORPORATION OF THE CITY OF LONDON Respondents

Counsel: Laura Gurr & Kevin Kok, for the Applicant Marc McLaren-Caux & Jan Nitoslawski, for the Respondent MPAC City of London not participating

HEARD: May 27, 2024

TRANQUILLI J.

[1] W.L.K. Seniors Assistance Association Inc. is a non-profit corporation that owns and operates a 49-unit apartment complex in London, Ontario for seniors. W.L.K. applies to the court for a municipal property taxation exemption for the year 2023 onward. The Municipal Property Assessment Corporation opposes the application.

[2] Pursuant to s. 3(1)(12)(iii) of the Assessment Act, R.S.O. 1990, c. A.31, land owned used and occupied by any charitable, non-profit philanthropic corporation supported in part by public funds and organized for the relief of the poor is exempt from municipal taxation.

[3] MPAC acknowledges that W.L.K. is a charitable, non-profit philanthropic corporation supported in part by public funds and which owns, uses and occupies land. At issue is whether W.L.K. has established on a balance of probabilities that the corporation is “organized for the relief of the poor.”

[4] W.L.K. submits that it has demonstrated it is organized for the relief of the poor. Its object is to provide low-rental housing for senior individuals and their families. It has addressed previous concerns about its eligibility for the tax exemption. It now participates in the City’s Rent Supplement Program and offers 10 of its units for Rent Geared-to-Income (“RGI”). It has developed a means test for the non-RGI units that conforms with the City’s housing policy and charges lower than the average market rent for its non-RGI units, in furtherance of its efforts to provide relief of the poor.

[5] MPAC maintains that the fact remains W.L.K. is not “organized for the relief of the poor” as that phrase has been interpreted in binding authority. Moreover, W.L.K.’s means test, and use of RGI tenancies does not demonstrate that its tenants are “poor” within the meaning of the legislation. Most W.L.K. tenants have not been shown to be “poor”. The non-RGI units are, in fact, being charged at market rent.

[6] These reasons explain why I conclude that this application must be dismissed.

[7] The outcome is determined by Religious Hospitallers of St. Joseph Housing Corp. v. Regional Assessment Commissioner. Despite its laudable goals and limited budget for capital expenditures, and the valuable work of its volunteer board, W.L.K. itself still does not engage in “endeavours” to relieve poverty within the meaning of Hospitallers and the Assessment Act exemption. The court remains bound by Hospitallers, as most recently reviewed by the Divisional Court in Stamford Kiwanis Non-Profit Homes Inc. v. MPAC, 2023 ONSC 6625. The court cannot identify a meaningful basis on which to distinguish W.L.K.’s activities from Hospitallers. Further, I am not persuaded that the means test and rent charged for the non-RGI units bring W.L.K. within the meaning of “poor” as contemplated by the exemption.

Analysis

[8] Hospitallers considered the application of the exemption to a multi-unit residential property that provided rental units to occupants on a subsidized basis. The court of appeal interpreted “organized for the relief of the poor” to mean “that it would be the corporation itself, by some form of endeavour of the corporation, that would provide the relief involved.” In Hospitallers, the court found the non-profit itself did “very little” in organizing such relief for the poor. It raised no funds by efforts of its members for the support of the institution, it did not manage the operation and the purchase and financing was government funded. The corporation itself provided nothing that was for the relief of the tenants: Hospitallers, at para. 13.

[9] W.L.K. submits it is “organized for the relief of the poor” because an exemption would not shift the financial burden to other levels of government, its board of directors is actively involved in the affairs of the non-profit, its tenants are “poor” and pay below market rents. Property tax savings from this exemption would also benefit the poor as it would allow the board to invest in and maintain high-quality affordable housing. These features distinguish W.L.K. from the organization of the housing corporation in Hospitallers.

[10] None of the points relied upon by W.L.K. serve to distinguish this non-profit from the holding in Hospitallers, which I am bound to apply.

[11] W.L.K. makes the point that unlike Hospitallers, it applies for grants where able and that it is otherwise responsible for any budgetary shortfall. It has extensive remedial capital needs that must be addressed to continue to provide safe and affordable units to its tenants. A tax exemption would enable W.L.K. to better meet those pressing financial needs. This is consistent with the relevant principles of statutory interpretation recognized in Québec (Communauté urbain) v. Corp. Notre-Dame de Bon-Secours, [1994] 3 S.C.R. 3. The Supreme Court of Canada noted that the imposition of a general obligation to pay a property tax so that government can meet its expenditures is not the absolute purpose of the Assessment Act. Exemption from property taxes allows organizations that perform activities that are of great benefit to either discrete groups of disadvantaged persons or to society as a whole spend more of their limited resources on those activities. The purpose of the property tax exemption to non-profit corporations “organized for the relief of the poor” recognizes that the public interest in granting these organizations additional resources to relieve poverty outweighs the public interest in generating revenue through taxation: Notre-Dame, at paras. 24-27.

[12] W.L.K.’s funding structure is different from the non-profit involved in Hospitallers, where the accommodations were entirely government subsidized. There is much to commend an emphasis on this point. However, it remains that the Court of Appeal emphasized that: “It is the property for which exemption is claimed and its actual operation and administration which are of primary concern in determining whether the exemption criteria are met.”: Hospitallers, at para. 11. A similar argument was unsuccessfully made by the applicant in Stamford and must also be rejected here for the same reason. The holding in Hospitallers does not turn on the funding distinction, it is the method of the housing corporation itself that must provide the relief from poverty: Stamford, at para. 54.

[13] It is also true that W.L.K.’s volunteer board of four members is actively involved in the affairs of the non-profit. However, this was also true in the unsuccessful application in Stamford, where it was recognized the housing corporation derives a significant benefit from volunteer services; however, that this was still insufficient to demonstrate the non-profit’s endeavour to provide relief from poverty. There was no evidence that the board did anything beyond what a typical board is required to do, give direction to a corporation. The evidence fell short of demonstrating the “endeavour” required by Hospitallers: Stamford at paras. 52-56. Similarly, in Residence “Joie De Vivre” Inc. v. Niagara Falls (City), [1988] O.J. No. 1649 the court held that while there was no question that the volunteer work done by the applicant’s directors was essential to the viability of the project, this did not make it into a project organized for the “relief of the poor”. Therefore, this distinction also does not to serve to assist W.L.K. in establishing that it is organized for the relief of poverty.

[14] Finally, irrespective of how W.L.K. is “organized”, the RGI units, the means test and the rent for non-RGI units also fall short of establishing that W.L.K. is organized for the relief of the “poor”.

[15] “Poverty” or “poor” within the meaning of this exemption is not defined with any precision but has been interpreted to require that an applicant demonstrate there is “an element of economic deprivation or need, the relief from which is a part of the purpose of the institution claiming exemption. The focus, thrust or emphasis must address poverty in economic terms”: London Jewish Community Village v. MPAC, 2020 ONSC 6794 at para. 19.iv.

[16] The average income of the tenants who occupy the 10 RGI units at W.L.K. is below the inflation-adjusted low-income cut-off published by Statistics Canada, therefore establishing these tenants would qualify as “poor” or “economically deprived”. However, this represents only about 20% of the applicant’s total number of units. The limited evidence available of the incomes of the non-RGI tenants would suggest they are not similarly “poor” on the Statistics Canada criteria. W.L.K. undertook a voluntary income survey of its tenants which yielded partial results. Of the 14 non-RGI tenants that responded, the median income was approximately $5,800 above the low-income cut-off. There is no evidence whatsoever of the income or assets of the tenants occupying the 25 other non-RGI units.

[17] W.L.K. contends that it charges below market rent to its non-RGI tenants, thereby again in furtherance of its objective to relieve poverty. Canada Mortgage Housing Corporation rental market data for London suggests W.L.K. unit rents are below the average. However, as MPAC notes, this data is of limited probative value in establishing W.L.K. rents are “below market”. The CMHC rental market data covers all residential units irrespective of age, amenity or neighbourhood. It includes a range and mix of apartments from “luxury” to “comfortable” to “standard” and covers both units with utilities included or in charged addition to rent. This skews the calculation of market rent for “standard” units such as those offered by W.L.K. The rent subsidized by the City for the RGI-units is also predicated on the non-RGI units being let at “market rent”. MPAC’s own data of fair market rent for the W.L.K. units would also suggest that the applicant is charging market rent for its non-RGI units.

[18] Although W.L.K. has now established an income-testing policy for non-RGI tenants, there was also no evidence of any prospective or current tenants being screened on this means basis. This fails to advance W.L.K.’s argument.

[19] The application is dismissed for the foregoing reasons. The parties advised that they have agreed on the disposition of costs.

Justice K. Tranquilli Released: August 22, 2024