Reflecting on Stamford Kiwanis: Charitable Exemption Broadened

This year, the Ontario Court of Appeal (“ONCA” or the “Court”) released a landmark decision in Stamford Kiwanis Non-Profit Homes Inc v Municipal Property Assessment Corporation, 2025 ONCA 450 (“Stamford Kiwanis”), expanding access to charitable municipal tax exemptions under Ontario’s Assessment Act, RSO 1990, c A.31 (the “Assessment Act”). To do so, a unanimous five-judge panel of the Court overturned its prior decision in Religious Hospitallers of St. Joseph Housing Corp v Regional Assessment Commissioner, Region 1, 1998 CanLII 2943 (ON CA) (“Religious Hospitallers”).

Background

Stamford Kiwanis Non-Profit Homes Inc. (“Stamford”) is a charitable, non-profit philanthropic corporation that provides affordable housing to low-income residents in Niagara Falls. Stamford applied for a property tax exemption under subparagraph 3(1)12(iii) of the Assessment Act, which exempts from taxation “[l]and owned, used and occupied by … any charitable, non-profit philanthropic corporation organized for the relief of the poor if the corporation is supported in part by public funds”. Stamford’s application was denied.

At issue was whether Stamford was “organized” for the relief of the poor pursuant to subparagraph 3(1)12(iii). Relevant to this analysis, was ONCA’s earlier decision in Religious Hospitallers, wherein the Court interpreted “organized” as requiring an applicant to establish that they provided relief to the poor “by some form of endeavour.” The organization in Religious Hospitallers provided affordable housing but did little else (e.g., managing the operation, fundraising). This was fatal to the claim for an exemption as the corporation was found to not be “organized” for the relief of the tenants within the meaning of the exemption.

The application judge and the Divisional Court determined that Stamford’s case was “on all fours” with Religious Hospitallers, and concluded that they were therefore bound by that decision (Stamford Kiwanis, at para. 22). Stamford appealed to ONCA.

The Appeal

On appeal, Stamford argued Religious Hospitallers was wrongly decided and should be overruled. ONCA examined the statutory language, context and purpose of subparagraph 3(1)12(iii). The Court emphasized that the exemption is designed:

[T]o allocate funds otherwise destined to defray government expenditures to alleviate the tax burden of charitable, non-profit philanthropic corporations that are relieving poverty thereby enabling their charitable, non-profit or philanthropic use of funds (Stamford Kiwanis, at para. 56).

The Court found that Religious Hospitallers misconstrued and undermined the legislative intent of the exemption and that the interpretation therein detracted from the purpose encapsulated in the provision (Stamford Kiwanis, at para. 86). In the Court’s view, the word “organized” did not suggest a requirement of some other endeavour, nor was there evidence of such a requirement to be found in the legislative debates. Rather, the Court found that in Religious Hospitallers, all the organization did was work to relieve poverty (i.e. by providing affordable housing to those in need). These characteristics, the Court held, reflected the legislative intent behind the provision and support the argument that Religious Hospitallers was wrongly decided (Stamford Kiwanis, at para. 72). In the Court’s opinion, Religious Hospitallers impeded the objective of the exemption through the introduction of a requirement divorced from both the text and purpose of the statute (Stamford Kiwanis, at para. 86).

The Court clarified that subparagraph 3(1)12(iii) does not require “some form of endeavour” for an organization to be “organized” for the relief of the poor. Rather, the Court explained, to be “organized” for relief of the poor, applicants must show:

• the primary purpose or use of the subject property is relief of the poor;
• the corporation operates at least in part for this purpose; and
• there is an element of economic deprivation on the part of the intended beneficiaries (Stamford Kiwanis, at para. 94).

ONCA found that Stamford met the exemption requirements and granted Stamford’s application, setting aside the judgment of the application judge and the order of the Divisional Court.

Key Takeaways

Stamford Kiwanis is a significant development for charitable, non-profit philanthropic corporations in Ontario, particularly those involved in providing affordable housing. ONCA’s ruling clarifies that there is no requirement for specific additional endeavours so long as the corporation is organized for the relief of the poor, meaning that the primary purpose or use of the subject property is the relief of the poor and that the corporation operates at least in part for that purpose.

On this basis, charitable organizations that were formerly ineligible for the subparagraph 3(1)12(iii) exemption should revisit their property tax status, as they may now be eligible under the new test. Similarly, charitable organizations that restructured their affairs to qualify for the exemption may want to revisit those restructuring decisions now that access to the exemption has been expanded.

Stamford Kiwanis has not yet been interpreted in subsequent decisions, so it is unclear how the Court’s analysis will impact the taxation of charitable organizations in this and other circumstances. For these reasons, we advise charitable organizations to stay alert and to continue to monitor for updates.