Ontario Senior Homeowners’ Property Tax Grant

August 23, 2010

Background

The Ontario Senior Homeowners' Property Tax Grant (the grant) is an annual amount provided to senior homeowners with low to moderate incomes to help offset their property taxes. The grant was created in the Taxation Act, 2007, S.O. 2007, c. 11, Sch. A (Taxation Act) as part of the Province of Ontario's commitment to help seniors stay in their homes. In 2009, the maximum grant was $250. In 2010 and subsequent years, the maximum grant will be $500.

An eligible senior is any individual who, on December 31 of the previous taxation year, was 64 years of age or older, was a resident of Ontario, owned and occupied (or whose spouse or common-law partner owned and occupied) a principal residence for which he/she (or his/her spouse or common-law partner) paid Ontario property taxes, was not confined to a prison or similar institution and meets the income requirements. In addition, the spouse or common-law partner of the individual must not have received a Property Tax Grant for the current fiscal year. 

Eligible seniors must apply for the grant when they file their personal income tax return. The amount of the grant is based on information provided in the senior's income tax return, including the senior's marital status, the amount the senior paid in property taxes and the senior's adjusted family net income. The Ontario Senior Homeowners' Property Tax Grant is in addition to the Property Tax Grant available to seniors. As with similar programs, the Canada Revenue Agency administers the Ontario Senior Homeowners' Property Tax Grant on behalf of the Province of Ontario.

Analysis

The Office of the Superintendent of Bankruptcy (OSB) was asked for its position on the treatment of the Ontario Senior Homeowners' Property Tax Grant in bankruptcy, namely (1) whether the grant is subject to the operation of insolvency legislation and, if so, (2) whether the grant is considered property of the bankrupt that vests in the trustee and is divisible among the bankrupt's creditors, or whether it is exempt from execution or seizure.

The enabling legislation of the grant is found under Part V.1 of the Taxation Act where, at subsection 104.1(16), it makes reference to insolvency legislation. Its only effect, however, is to ensure, in the case of an eligible senior who was bankrupt at any time in the previous taxation year, that the calculation made to determine the amount of the grant is based on the eligible senior's adjusted income over the entire calendar year beginning on January 1 and ending on December 31, and not on a portion of it based on the date of bankruptcy. The subsection reads:

104.1(16) If an individual who is an eligible senior for a taxation year was bankrupt at any time in the previous taxation year,

(a) the eligible senior is deemed to have only one taxation year in that previous year, beginning on January 1 and ending on December 31; and

(b) the eligible senior's adjusted income for that previous taxation year is deemed to be the total amount of the eligible senior's adjusted income for the calendar year ending at the end of that taxation year.
2008, c. 7, Sched. S, s. 30.

There is no provision in the Taxation Act stipulating that the grant is not subject to the operation of any law relating to bankruptcy or insolvency and the enabling legislation is silent in terms of the treatment of the grant in bankruptcy. However, subsection 104.1(12) expressly states that the grant cannot be assigned, charged, attached, given as security or garnished. The provision states:

104.1(12) A grant under this section or an entitlement to a grant under this section, as the case may be,

(a)shall not be assigned, charged, attached or given as security; and

(b)shall not be garnished. 2008, c. 7, Sched. S, s. 30.

While the language used in the English version of the provision does not expressly state that the grant is "exempt from execution or seizure", as the terms are used in paragraph 67(1)(b) of the Bankruptcy and Insolvency Act (BIA) and in other statutes that provide for similar types of grants or credits, it is the OSB's view that the combined reading of the English and French versions of subsection 104.1(12) of the Taxation Act has the effect of qualifying the grant as exempt pursuant to paragraph 67(1)(b) of the BIA.

The French version of subsection 104.1(12) reads as follows:

(12) La subvention prévue au présent article et tout droit à cette subvention sont soumis aux règles suivantes :

a) ils sont incessibles, insaisissables et ne peuvent pas être grevés ni donnés pour sûreté;

b) ils ne constituent pas des sommes saisissables. 2008, chap. 7, annexe S, art. 30.

The expression "shall not be attached" in the English version of subsection 104.1(12) translates to « insaisissable » in the French version. The definition of "attach" in Black's Law Dictionary means "to take or seize under legal authority." Thus, "shall not be attached" is consistent with the French term « insaisissable ».

Conclusion

It is the OSB's position, subject to court interpretation to the contrary, that the Ontario Senior Homeowners' Property Tax Grant falls under the scope of paragraph 67(1)(b) of the BIA and, therefore, does not form part of the property of the bankrupt that is divisible among his/her creditors.

For more information on the Ontario Senior Homeowners' Property Tax Grant, see the Ontario government's website.