By Nancy E. Claridge and Adriel N. Clayton

For charities and not-for-profits dedicated to alleviating poverty through affordable housing, a significant ruling by the Ontario Court of Appeal has provided much-needed clarity and a more expansive interpretation of tax exemption eligibility. In Stamford Kiwanis Non-Profit Homes Inc. v. Municipal Property Assessment Corporation, released on June 20, 2025, the Court of Appeal overturned a long-standing and restrictive precedent, potentially easing the path for similar organizations to gain property tax exemptions. This decision is vital for organizations providing housing for low-income individuals, allowing them to focus more resources directly on their charitable missions.

The case involved Stamford Kiwanis Non-Profit Homes Inc. (the “Appellant”), a charitable, non-profit philanthropic corporation, supported in part by public funds, that provides affordable housing to low-income residents in the City of Niagara Falls. Since the 1980s, providing affordable housing has been the Appellant’s sole activity. Stamford Kiwanis sought a declaration that three properties it owns were exempt from municipal taxation under paragraph 3(1)12(iii) of the Assessment Act (the “Act”). This section exempts “Land owned, used and occupied by […] any charitable, non-profit philanthropic corporation organized for the relief of the poor if the corporation is supported in part by public funds.”

While the Municipal Property Assessment Corporation (MPAC) and the City of Niagara Falls conceded that Stamford Kiwanis met most criteria, the central dispute was whether the Appellant was “organized for the relief of the poor.” Both the application judge and the Divisional Court had dismissed the Appellant’s application, feeling bound by the restrictive interpretation set out in the 1998 Court of Appeal decision, Religious Hospitallers of St. Joseph Housing Corp. v. Regional Assessment Commissioner (“Religious Hospitallers”).

In Religious Hospitallers, the court had interpreted “organized for the relief of the poor” to require that the institution itself, “by some form of endeavour,” would provide the relief. This interpretation required organizations to actively undertake efforts beyond mere property ownership, such as fundraising or managing property, creating restrictive conditions for exemption eligibility.

In the case at hand, the Court of Appeal concluded that Religious Hospitallers was wrongly decided, identifying several flaws. Religious Hospitallers failed to apply the “dual-purpose” interpretive approach mandated by the Supreme Court of Canada, which recognizes that tax legislation serves both to raise funds and achieve social and economic objectives. It was also inconsistent with the Supreme Court’s broader view in Stouffville (Village) (Assessment Commissioner) v. Mennonite Home Assn. of York County, which did not impose an “endeavour” requirement for exemptions.

After concluding Religious Hospitallers was wrongly decided, the Court of Appeal undertook a weighing exercise to determine if it should be overruled, considering the advantages and disadvantages of correcting the error. The Court of Appeal found that Religious Hospitallers rested on an “unstable foundation.” The Court of Appeal explicitly rejected arguments by MPAC and the City that the exemption would merely shift financial burdens from the province to municipalities or negatively impact tenant tax credits, deeming these insufficient grounds to deny an exemption to a deserving applicant.

With Religious Hospitallers overruled, the Court of Appeal clarified the test for exemption under paragraph 3(1)12(iii) of the Act. An applicant must: (i) own, use, and occupy the land; (ii) be a charitable, non-profit philanthropic corporation; (iii) be organized for the relief of the poor (meaning the primary purpose or use of the subject property is relief of the poor, and the corporation operates at least in part for the relief of the poor, with an element of economic deprivation or need on the part of its intended beneficiaries); and (iv) be supported in part by public funds.

Applying this clarified test, the Court of Appeal found that the Appellant met all the requirements for exemption. The Appellant’s sole activity since its inception has been providing affordable housing to low-income residents, fulfilling the legislative purpose of providing relief to the poor. Its ownership, operation, and management of the properties, coupled with public funding and a focus on economically deprived tenants, squarely met the criteria.

It is crucial to note that Court of Appeal’s clarification of “organized for the relief of the poor” specifically pertains to paragraph 3(1)12(iii) of the Assessment Act and its application to property tax exemptions. It does not alter the broader understanding of “relief of poverty” as a recognized charitable purpose under the common law for the purposes of registration under the Income Tax Act.

The Court of Appeal’s decision to allow the appeal and grant the exemption marks a significant victory for non-profit housing providers in Ontario. It provides a clearer, more equitable framework for assessing property tax exemptions, aligning the Assessment Act’s interpretation with the broader social purposes of charitable work. This should encourage other similarly organised and operated charitable and non-profit housing corporation in seeking an exemption under the Assessment Act.

​Read the June 2025 Charity & NFP Law Update