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 asenior living in a Toronto Community Housing Corporation (TCHC) building, James saidshe's been receiving the Ontario Trillium Benefit (OTB) for years, paid monthly.But sherecently learned not only will she no longerbe 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 unitsfrom 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 sufferedfinancially due tothe pandemic and now because of increasing inflation.

Trillium Benefit

The OTBis aprovincial benefit that taxpayers with low-to-moderate incomescan claim through their annual returns.It's a combination of the Ontario Sales Tax Credit (OSTC) andthe 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 sixyears.

"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," saidVanderherberg.

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 shownup at their clinic with the letters.

"People that went and got this [credit] did so in good faith,people trying to file their taxesas 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 itsresidents ineligible for the OTB was granted more than 10 years ago, it's beendifficult to trace how itwas 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 saidstaff are doing everything they can to communicate this exemption to tenantsthrough 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 CRAadministers the OTB on behalf of the province. The Ministry of Finance told CBCNews it hasn't recently directed the CRA to change any existing audit criteria for the credit and couldn't confirmdetails.

In a statement, the CRAsaid it couldn't disclose how many letters it's recently sent to TCHC residents because it might compromise the integrity of itscompliance 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 Vivancosay the CRA should erase the balances owed byaffected tenants and James agrees. She saidif she's no longer eligible for the benefit, making ends meet will be difficultwith a debt of$531.16.

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

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