In St. Catharines Seniors Apartments Phase Three Inc. v Municipal Property Assessment Corporation et al, a recent endorsement in the Ontario Superior Court released on June 17, 2015, the court addresses an application by a housing charity for exemption from municipal taxation. Specifically, the housing provider sought exemption under paragraph 12(iii) of section 3(1) of the Ontario Assessment Act (the “Act”), which exempts from taxation lands owned by “any charitable, non-profit philanthropic corporation organized for the relief of the poor if the corporation is supported in part by public funds.”
The charity operates a residential apartment building for low income seniors. The issue before the court was whether the residents of the apartment building could be considered “poor” as contemplated by the Act to relieve poverty, or whether it merely provides affordable housing to seniors.
The court clarified that in determining a charity’s purpose, it is the actual operation of the organization rather than its corporate objects that is the determining factor. It was therefore immaterial that the corporate objects of the applicant do not mention “the poor.” The court also held that “poor” is a relative term; it does not mean the very poorest or the completely destitute. Instead, only an element of economic deprivation or need is required.
After comparing the low income cut-off statistic numbers for the community where the building is located with the income of the residents, the court was satisfied that the average annual income of $24,140 and a median annual income of $22,042 of the residents would equate with any common sense notion of “poor” as envisioned by the Act. Even if 5 of the 35 units did not meet the definition of “poor”, the court was satisfied that the remaining 30 units being rented to the “poor” meant that the primary actual purpose of the charity continued to be to provide affordable housing for poor senior citizens.
This case follows the decisions of previous cases upon which charities in Ontario that provide housing for the “poor” with public funds rely upon exemption from municipal taxes. With the continuing trend of the growth of the senior population in many cities, this tax benefit is especially helpful to those that provide housing to “poor” seniors.