Starting in 2019, the Government of Ontario has added a new condition for eligibility for a reduction in the rent payable by a low-income household:

“A household that has been receiving rent-geared-to-income assistance ceases to be eligible for such assistance if a member of the household whose income is to be included in the calculation of the geared-to-income rent payable by the household has not filed a return of income under the Income Tax Act (Canada) for the member’s taxation year….“

Section 29.1 (1) of Ontario Regulation 367/11 (Housing Services Act, 2011)

Background

In Ontario, the rent on approaching 200,000 tenancies is subsidized by the Government of Ontario.

Such rent is called Rent-Geared-to-Income (RGI), and it is calculated by the landlord in accordance with government regulation and policies established by the Ontario Ministry of Municipal Affairs and Housing.

Why is this important?

The value of the RGI subsidy many individuals and families in Ontario in public and non-profit housing will get – in the form of a reduction in the rent they have to pay – is likely to be greater than the total of the Ontario Energy and Property Tax Credit (OEPTC) and the Ontario Sales Tax Credit, both of which arise from filing an income tax and benefit return.

Implications

The introduction in 2019 of this new condition for RGI eligibility has, for a large number of low-income people in Ontario, made it even more important that they file their return on time.

Because of COVID-19 and the fact that the new policy may have had a “phase-in” period, the impact in 2020 may have been limited. However, it is possible that in 2021 public and non-profit housing providers will have little scope for flexibility in relation to the 2020 tax return. This has implications not only for clients but also for tax-clinic hosts, as demand for the service may increase.