Service des finances

Tax refund cheques sometimes remain uncashed for a variety of reasons: long delays between the challenge of the tax bill and the final judgment (sometimes years); owners have moved; etc. Yet, the amounts involved can be significant.

In 2007, the Service des finances had introduced, at the OdM’s request, a new procedure designed to track down owners who had not cashed a tax refund cheque. Between 2007 and 2015, about 2,000 expired cheques were so re-issued for a total value exceeding $1 million.

In 2018, the OdM discovers that this procedure has not been applied since 2015. We intervene again. The Service des finances estimates that the refunds not cashed in since 2015 would amount to approximately $290,000.

Following our discussions, the Service des finances reinstates the follow-up procedure retroactively to 2015. As of December 18, 2018, cheques valued at about $126,500 were re-issued. The Service des finances will pursue the process in 2019. The OdM will conduct annual follow-ups.

Arrondissement d’Outremont and Service des finances

The owner of a semi-commercial building disputes the City’s billing method on the basis of a water meter that is applied in her case, since 2013. The citizen notes that several of the Borough’s non-residential buildings are not equipped with a water meter: other commercial owners therefore only pay the Special Water Tax, which the citizen also pays for, but are not billed as she is for their actual water consumption. She claims that this inequity unduly benefits the other non-residential owners, and particularly her business competitor.

The jurisprudence is clear: to be legal, a tax or charge must be applied uniformly, fairly and reasonably to all citizens subject to the regulation.

Yet, in Arrondissement d’Outremont, the regulation that provides billing on the basis of a water meter is clearly not uniformly applied. Indeed, whereas approximately 200 buildings were legally required to install a water meter, only 38 water meters had been installed.

Our office concludes that the Service des finances‘ explanations over this disparity do not comply with the applicable legal framework.

• The City agrees to reimburse the citizen the amounts that she was charged for on this basis (a little over $1,500.);

• Another citizen who had filed a similar complaint also receives a refund.

Incidentally, the City indicates that the installation of water meters in this Borough should be completed before 2018.

The OdM plans to intervene again in 2018 to ask the City to reimburse the other non-residential owners of Outremont who were billed on the basis of a water meter readings, in the same context. For us, such corrective action in equity is paramount.

Arrondissement de Villeray–Saint-Michel–Parc-Extension

In 2006, the Borough authorizes the plaintiff to build an access ramp (road) and driveway in order to access his garage. A portion of this access road is on the City’s right-of-way: the citizen is therefore crossing this right-of-way when entering or exiting his garage. The citizen subsequently receives a yearly invoice for “permanent occupancy of public domain”.

In 2013, the Borough Council amended its Règlement sur les tarifs to specifically exclude this type of situation from being subjected to such occupancy fees. The citizen claims a refund for the intervening years. The Borough responds that it cannot do so, because these amounts had been invoiced under the regulation in force at that time.

This situation seems unfair to us. We discuss it with the Borough. The Borough seeks the opinion from Ville de Montréal’s legal department suggesting that the Borough Council adopts a resolution that would specifically authorize a refund to the citizen, which was done. A reimbursement retroactive to 2006 is subsequently remitted to the citizen: for a total of $2,850.85.

The OdM plans to intervene again to ensure that other citizens who would have been billed for such fees, in comparable circumstances, are also reimbursed.

Service des finances

A citizen sells his building to a company which ultimately does not pay off the purchase price. The building had been given as collateral. The plaintiff takes legal action in order to recover his building for cause of non-payment. The Court rules in his favor: he reclaims ownership of the building.

Following this ruling, Ville de Montréal claims a property transfer tax of approximately $36,000 on the basis that a property transfer had occurred. The citizen disputes this invoice, adding that he had already paid the transfer tax when he initially purchased the building.

After  thorough enquiry and legal research, the OdM considers that, in this particular case, the building’s trade-in does not constitute a “property transfer” under the applicable legislation: therefore, the property transfer tax should not have been charged.

The Ombudsman issues a RECOMMENDATION in that respect. The Service des finances accepts it and cancels the invoice.

A merchant notices that his water tax bill for 2012 is twice as high as the previous ones.  He complains to the City.

In March 2013, the City notes that the water consumption showing on this water meter is the same as in November 2012: clearly, the water meter stopped working and must be replaced.

Once the new meter is installed, in June 2013, the water consumption measures drop drastically.  The City adjusts the water bill for the first months of 2013, based on the consumption measured by the new meter.  It refuses, however, to also readjust the 2012 bill.

The citizen asks for our intervention.

According to the City, it is almost impossible for a defective meter to show a consumption which is higher than the actual one.  In its opinion, therefore, the quantities shown on the old meter must have been consumed.  The City believes that the high 2012 consumption must have been caused by an unusual event such as an increase in trade activity, a broken pipe, a water leak.

The City did not conduct an investigation to show such a cause or specify the nature of the meter’s defect.  On the other hand, the citizen insists that no unusual event had occurred in 2012.

• The OdM analyses the applicable rules. We find a provision stating that when “a meter is defective, the account is established based on the average consumption anterior or ulterior to the meter defect”. (translation)

• In the OdM’s opinion, the facts on record reasonably suggest that the meter was already defective in November 2012. As a result, this regulatory provision should apply to the 2012 bill as well.

• After analysis, the City accepts our conclusion. The merchant’s water bills are reduced for 2012 and 2013, based on his average consumption in 2013 and 2014.

• A total amount of $8,300 is reimbursed.

Since 2000, the City had been billing a second local improvement tax to the owner of a residence located on a street corner; the rules, however, provided that buildings on a corner should not be imposed two local improvement taxes even if both streets had been repaired.

In August 2014, the City realizes its mistake.  It quickly informs the citizen by letter, and reimburses him for the last three years.

The Service des finances explains that the three year time limit provided for in the Civil Code prevents the City from reimbursing beyond that period:  the Department has a legal opinion supporting this conclusion.

The citizen disagrees and wants a full refund. He asked for the OdM’s assistance.

We conduct a long investigation and an in-depth legal research and analysis; we then intervene in favour of the citizen.

Referring to well established legal principles, the OdM submits the following arguments to the Service des finances:

• Though the City’s mistake was clearly made in good faith, the citizen had no way of knowing, in the present file, that he was being overbilled. Indeed, the provision by virtue of which he should have been exempted from the second local improvement tax was not in a Bylaw but rather in a City Council Resolution.

• In this context, the time limit to claim reimbursement for the whole period only started running from the date on which the citizen had learned of the mistake (in 2014).

• Moreover, the integral refund to this citizen does not jeopardize the stability of the City’s finances. The Services des finances had confirmed that such a situation was exceptional, even unique, and that no other citizen was in a similar situation.

The City later informs us that it will provide full reimbursement to the citizen going back to year 2000, with interests.  This amounted to nearly $27,000.

In 2013, the Direction de l’habitation committed to no longer impose criteria not provided for in the By-laws governing home renovation grants.  A modification to the regulation is planned but has not yet taken place.  The Direction de l’habitation has therefore renewed this commitment.

Our office questioned the merits of certain criteria used by the Direction de l’habitation for denying grants under the Rénovation à la carte program.

Our investigation confirmed that some of the criteria imposed were not provided for or authorized by any regulation. Although they may be reasonable, these requirements could not, therefore, legally justify the refusal of a grant. We informed the director accordingly.

The Direction de l’habitation undertook to review all of its programs for renovation subsidies in 2014, and to take measures to ensure their conformity to the applicable laws and By-laws. In the meantime, it also undertook not to deny any application for a renovation subsidy based on criteria which are not legally provided for or authorized.

A citizen of Arrondissement de Rivières-des-Prairies―Pointe-aux-Trembles was contesting a local improvement tax bill for paving and lawnedging work done on his street, in 2006. He was also questioning the calculation method and inquired as to the portion taken on by Ville de Montréal.

After investigation and analysis of the documents, we concluded that this local improvement tax was justified. Although some work that had been done before 2006 had not been billed to the bordering owners, this exemption was due to the temporary nature of these works. The 2006 paving and lawnedging work, however, were for permanent first generation infrastructures and, therefore, the borough was justified to charge the cost to the bordering owners.

While analysing the documents, however, we noticed that a substantially large vacant lot had not been taken into account in the calculation of this tax. The reason was that this lot, which belongs to Ville de Montréal, was not listed on the Property Assessment Roll.

At our request, the Service des finances calculated the impact of this oversight on the amounts billed to the bordering owners: it turned out to be of about 20%, globally.

The Department undertook to add this City property to the Property Assessment Roll and to recalculate the amounts of the local improvement tax charged to the bordering owners, accordingly.

As a result, bordering owners received a partial refund of the amount paid in 2010 and their future yearly tax bills will also be reduced, accordingly.

A citizen complained about a new tax imposed on her and her co-owners since 2007, by Arrondissement Le Plateau-Mont-Royal, because part of their garage encroaches on public property.

This building was built in 1905 at a time where Certificates of Localisation did not exist: the property was built according to the standards and requirements of the time and the surface it covers has not been modified ever since.

The first Certificate of localisation regarding this property was issued in 1972, almost 70 years after its construction: this document does not mention any encroachment on public property. The building has been sold many times over the years, without any Notary ever mentioning any encroachment on public property.

In 2005, the Government of Québec conducted cadastral review, following which our complainant was informed that the cadastral documents relating to her property had been modified. This modification was made although there had not been any physical external modification to the building or garage and even after the said modification, no new tax was claimed by either the City or by Arrondissement Le Plateau-Mont-Royal, with regard to this property.

In the context of a recent sale of one of the dwellings of this undivided co-ownership, around 2007, the acting Notary noted for the first time an encroachment of the garage on the public domain. From that moment on, Arrondissement Le Plateau-Mont-Royal decided to charge the co-owners an annual rent for the permanent occupation of public domain. The citizen immediately contested this new tax with the borough, without any success.

Section 50 of the Règlement sur l’occupation du domaine public in effect in this borough states that

“… when the price paid annually for a permanent occupation which existed before December 31st, 1995 is less than $100.00, this occupation shall be free as of January 1996 and shall so remain, as long as the said occupation is not modified. In the case of a modification, the price of the right to occupy is determined in accordance with the section IV, whether it is about a replacement license as prescribed by section 48 or a new license”.

The plaintiff submitted that, since the owners of their building had never paid any rent for occupation of the public domain, they should have benefited from this provision. According to the borough, however, this section does not allow such an interpretation when no rent whatsoever was paid to the City.

After thorough analysis, the Ombudsman de Montréal concluded that, regardless of the interpretation of section 50, the exceptional situation in which these citizens found themselves was unjust and unfair. We initiated, therefore, discussions with Arrondissement Le Plateau-Mont-Royal, in search of a satisfactory solution for both parties.

The Borough Council of Arrondissement Le Plateau-Mont-Royal adopted an amendment of the aforementioned section 50 to add the possibility of free occupation of the public domain, in situations of encroachment similar to the one at stake. The new provisions state that:

“Subject to the decision of the Borough Council in each case, permanent occupation of public domain resulting from an encroachment in good faith, prior to January 1st, 1996, which was discovered following a cadastral review, may also be free: a Certificate of localisation prepared by a land surveyor before January 1st, 1996, showing the building as it actually stands and not mentioning the encroachment constitutes sufficient proof in this regard”.

To obtain this right to gratuitousness, the owners must submit a request to that effect to the borough. In our specific file, the Borough Council granted gratuitousness to co-owners concerned, as of 2009.

As for the amounts they had paid for 2007 and 2008, the new provisions of the By-Law had no retroactive effect. Since this new tax had immediately been contested in 2007, however, we considered that the 2 years period it took to settle this file should not prejudice the citizens in question. The borough accepted our arguments and, therefore, it undertook to reimburse the co-owners, on an exceptional basis.

In 1963, an insurance broker office was located in the basement of a triplex. It is only from 2003, however, that Ville de Montréal considered this basement as commercial, for the purpose of its taxation.

In 2004, this professional office was sold and the new owner left the premises soon after, the same year. Afterwards, the borough refused to issue a permit allowing commercial/professional operations in this basement on the basis that the building is residential and that only the residing owner can operate a professional business therein.

As early as 2005, the citizen requested that the City modifies the classification of his basement, from commercial to residential, which would have a significant impact on his property tax bill. He also requested a tax refund, retroactive to January 1, 2005, between the taxes he had actually paid and the amount he should have. Both requests were denied.

The Ombudsman took steps with the Direction de l’évaluation foncière of Service des affaires corporatives which later confirmed that the property assessment roll had finally been modified to make the entire building “residential”, as of January 1, 2006. The citizen would, therefore, be reimbursed retroactively to that date.

In light of the fact that the citizen had undertaken his requests as early as 2005, the Ombudsman de Montréal pursued her initiative to request retroactivity for the year 2005 as well, which she finally obtained. The citizen was very happy, indeed.

In the course of an investigation, we noted that the Service des finances was not following up on cheques issued to citizens for the reimbursement of property taxes to ensure they had effectively been cashed in. Such cheques are often issued a long time after the citizen has contested his/her property assessment roll.

We contacted the Service des finances to explore how this situation could be improved, to the benefit of Montrealers.

Following our discussions, the Service des finances agreed to implement a new follow-up policy on cheques related to the reimbursement of property taxes. The Service des finances has since created a File on property tax cheques that enables them to identify the cheques that are not cashed in within 6 months of their issuance date. With this information, an employee can now try to retrace the taxpayer concerned and arrange for the issuance of a new cheque.

The implementation of this new procedure took some time, however, and the issuance of replacement cheques began only in early 2009: the Department fist handled expired cheques that had been issued in 2007.

This new policy is clearly positive for many citizens. The issuance of a new cheque or the application of a corresponding credit to another account of this citizen normally occurs within 3 to 6 months, depending on the time of the year.

The Service des finances estimates that, since the implementation of this new policy, approximately $540,000 have been returned to 1491 taxpayers.

A citizen is contesting the decision of the Service de la mise en valeur du territoire et du patrimoine not to grant him the subsidy he was awaiting, under the Home Ownership Program.

Initially, the citizen satisfied all of the eligibility criteria of the program. The reason why he was later denied the subsidy was that his daughter had attained her majority before the date of publication of his Deed of Sale. This detail is important because the number of minor children in the household has a direct impact on the right to the subsidy.

Our thorough investigation confirmed that the citizen had completed all of the necessary steps within the prescribed delays including his signing of his Deed of Sale. It was an inadequate handling of his file, by an outside City representative, which caused undue delays before the Deed of Sale was signed by the other parties and, therefore, before it could be published. It was during this period that the citizen’s daughter attained her majority. We also noted that, as soon as he had himself signed the Deed of Sale, the keys to his new condo had been given to the citizen who immediately took possession of it. The citizen was, therefore, justified in his belief that, from that moment on, the sale was final.

The Ombudsman de Montréal contacted the concerned authorities to discuss the unusual circumstances of this file, notably the abnormal delays which were not imputable to the citizen. Given these circumstances, the Service de la mise en valeur du territoire et du patrimoine agreed to pay the citizen, on an exceptional basis, the $7,500.00 subsidy which he had been denied.

Following a Statement of Offence confirming many defects to be corrected in her apartment building, the owner asked for and obtained a municipal subsidy of $115,200.00 under the Major Residential Renovation Program: a first payment of $57,600.00 was forwarded to her, shortly afterwards.

This subsidy was subject to many conditions, one of which was that there would be limits to the rents that could be charged to tenants, after the renovations. The citizen committed to respect all of these conditions, in writing and in a notarized document.

When she was made aware of the maximum rents she was authorized to charge, however, the citizen objected, finding them too low. She asked Ville de Montréal to convert her initial subsidy into a subsidy for minor repairs, which was denied.

The authorized amounts of rents were established in accordance with the By-law concerning contributions for residential renovation and demolition-reconstruction. The provisions therein, with regard to future rents, are to ensure that the apartments remain affordable and that prior tenants are not unduly penalized, as a result of the renovations.

In regards to the City’s refusal to change the nature of the subsidy, the Ombudsman investigated and concluded that Ville de Montréal decision was justified. The concerned renovations were definitely not minor repairs and, moreover, no renovation subsidies for minor repairs had been granted, since March 2005, due to a lack of funds in the program.

Although the citizen had already waived her right to her grant for major works, we obtained, from the Service de la mise en valeur du territoire et du patrimoine, that she could keep this subsidy, providing she conforms with the conditions of the program, including the calculation of rents. If she accepted, the citizen would not have to reimburse the $57,600.00 already received and she would obtain a second such payment. A delay was granted to the owner to confirm her final decision.

A citizen submitted a complaint to the Ombudsman de Montréal so that a verbal agreement reached in 2004, with Direction de l’évaluation foncière of Ville de Montréal, be respected.

The citizen submitted that under the said agreement, he had been asked to complete and return a document, within a specific delay, so that the City could re-examine the assessment of his property. However, he did not understand some of the information he had to provide and had tried to reach the employee in charge of his file, unsuccessfully. When he finally talked to another person who provided the needed explanations, the delay had expired and the department considered the agreement no longer binding.

Our investigation confirmed that there was such an agreement, in 2004, and that during the delay granted to the citizen for the production of the required document, the employee in charge of his file was indeed absent from work, for health reasons. As it appears, it was most likely because of this person’s absence that the citizen could not produce the required document in due time.

Following our intervention, Direction de l’évaluation foncière accepted to re-consider the file. As a result, the department analyzed the citizen’s information and reduced the assessment of his property, in accordance with the 2004 agreement.

New tax invoices were issued for the years 2004, 2005, 2006 and the amounts which had been overpaid will be reimbursed to the citizen or credited on his future invoices.

The intervention of the Ombudsman de Montréal thus allowed to gain the respect of the previous agreement.

The president of a cultural organization complained to the Ombudsman de Montréal to obtain a municipal subsidy for the year 2005, for the group she represented.

She explained that in 2004, they had received two different subsidies through a municipal program supporting cultural organizations and that, at the time, Ville de Montréal had confirmed they would also receive a subsidy, in 2005.

Our investigation showed that the subsidy program concerned herein was changed dramatically after 2004 and, as a result, the organization no longer meets the eligibility rules.

Notwithstanding the above and because Ville de Montréal had confirmed the organization it would receive a subsidy in 2005, Service du développement culturel, de la qualité du milieu de vie et de la diversité ethnoculturelle Recommended to the Executive Committee of Ville de Montréal to grant to this organization the $2,000 financial support that had been “promised”.

The Executive Committee of Ville de Montréal accepted this Recommendation and the organization did receive the subsidy, retroactively, for 2005.

A citizen sought redress from the Ombudsman de Montréal because he believed he had the right to a grant that the city had refused him, for the demolition and reconstruction of a property he had recently acquired. Before buying this property, the citizen had checked the applicable by-laws to find out if the modifications he was planning to do on this house were allowed.

The city asked the citizen to undertake major modifications of the plans he submitted to support his application, in order to promote a better architectural integration of the new house in its urban environment. According to city representatives, the projected new construction was too dissimilar to the style of the neighbouring houses, and this is why they made the requested modifications a mandatory condition for the approval of the grant.

Despite the apparent merit of this condition imposed by the city, the Ombudsman de Montréal observed that the prerequisite criteria for the grant concerned were specifically governed by regulations, and that the applicable by-law did not include the « architectural integration » criterion the city was relying upon in its decision to refuse the grant.

Accordingly, the Ombudsman de Montréal intervened with the concerned department to explain that even if the conditions imposed on the citizen could be justified from an architectural point of view, they were not justified legally.

Consequently, the department admitted their error and approved the grant to the citizen.

Over the course of the exchanges with representatives of the concerned department, the Ombudsman de Montréal also explained the type of changes that should be made to the regulatory text, should they deem it important to have the right to impose certain criteria of an architectural or heritage nature, before allocating a grant to a citizen.