Toronto Community Housing tenants blindsided by CRA demand to pay back benefits

Anne James began receiving letters from the Canada Revenue Agency in December. The one she received last week informed her she owed hundreds of dollars in taxes.

"It's kind of like a smack in the face," said the 82-year-old, who showed the letter to CBC News.

As a senior living in a Toronto Community Housing Corporation (TCHC) building, James said she's been receiving the Ontario Trillium Benefit (OTB) for years, paid monthly. But she recently learned not only will she no longer be eligible for a portion of it, she also needs to repay part of it.

"I've done my taxes; I've done everything the way that is supposed to be done for years, and now all of a sudden I'm getting a letter saying that I owe over $500." 

In 2011, the City of Toronto exempted approximately 53,000 of TCHC's nearly 60,000 units from municipal education property taxes. As a result, tenants in those units were no longer eligible to receive the Ontario Energy and Property Tax Credit (OEPTC) under the Trillium Benefit. But some tenants filing their taxes have continued to collect it unknowingly, and have recently been asked to repay it.

Advocates who work with low-income populations say it's a huge blow for some of the city's most vulnerable — many of whom have suffered financially due to the pandemic and now because of increasing inflation.

Trillium Benefit

The OTB is a provincial benefit that taxpayers with low-to-moderate incomes can claim through their annual returns. It's a combination of the Ontario Sales Tax Credit (OSTC) and the Ontario Energy and Property Tax Credit (OEPTC) for southern Ontario residents or the Northern Ontario Energy Credit (NOEC).

In recent months, some who run financial empowerment programs for low-income residents say they've been receiving calls from TCHC tenants about CRA letters. 

"We have been approached by staff from over 10 different buildings who say their clients have received that similar message or letter from the CRA. And so it's a pretty concerning trend," said Steve Vanderherberg, director of economic empowerment at WoodGreen Community Services.

"On average, the amount that they would be owing is around $950, which consists of about three per cent of their annual income, or around five per cent of their income after rent itself to pay for basic necessities like food and transportation."

Vanderherberg said most people he's spoken to are being asked to pay back the Trillium benefits for one year, but the CRA is able to collect it going back six years.

"When those letters state that both their taxes are being reassessed and that they have to pay back money that they don't have, the anxiety can turn to kind of a helplessness," said Vanderherberg.

Bad timing

Pablo Vivanco, director of Programs and Community Development at the Jane-Finch Centre — which also runs a tax clinic and financial empowerment program — says a few dozen people have shown up at their clinic with the letters.

"People that went and got this [credit] did so in good faith, people trying to file their taxes as you're supposed to do," he said.

"The prospect of having that sort of debt, that sort of burden is something that is really impacting people significantly," Vivanco added.

"They're thinking about how they're going to pay that back and still be able to put food on the table."

TCHC said since the exemption that made some of its residents ineligible for the OTB was granted more than 10 years ago, it's been difficult to trace how it was communicated to tenants. 

"If we could have predicted this very abrupt and unforeseen set of circumstances, we would have done more to communicate what this change was," said Robin Smith,TCHC's manager of media relations.

Smith said TCHC only learned of the letters from the CRA through various tenants. He said staff are doing everything they can to communicate this exemption to tenants through posters, its website and through staff in its buildings.

"This could be very catastrophic for someone who is not able to repay this debt and did not understand that they were going to incur it," Smith said.

"We're working closely with the City of Toronto to provide information to try to go to bat for tenants and swing as hard as we can."

Will 'work with' tenants, CRA says 

The CRA administers the OTB on behalf of the province. The Ministry of Finance told CBC News it hasn't recently directed the CRA to change any existing audit criteria for the credit and couldn't confirm details.

In a statement, the CRA said it couldn't disclose how many letters it's recently sent to TCHC residents because it might compromise the integrity of its compliance efforts. It didn't respond directly to questions about why some of the letters were being sent now, as opposed to years ago, but said there are options for taxpayers who can't repay the balances, including payment arrangements.

"We will work with impacted individuals on a case-by-case basis."

Advocates like Vivanco say the CRA should erase the balances owed by affected tenants and James agrees. She said if she's no longer eligible for the benefit, making ends meet will be difficult with a debt of $531.16. 

"I don't know where that [money] is going to come from to pay it back," said James, who added she also worried about some of her neighbours.

"I think that a lot of the people in the building are affected by this emotionally and mentally."