Charities that serve economically vulnerable populations will no longer be required to artificially structure their activities to take advantage of one of Ontario’s broader charitable exemptions from property tax. The Ontario Court of Appeal (the “Court” or the “Court of Appeal”) took the unusual step of overturning its own 1998 decision, eliminating a test it deemed inconsistent with the modern “dual-purpose interpretive” approach to taxation statutes.  

A more detailed consideration of the legal principles involved, including their interplay with other areas of charity law and Canada Revenue Agency concepts, as well as how charities might now structure themselves more effectively, will be the subject of a forthcoming article by one of the authors in our next newsletter.

In this article, we explore what this legal shift means to charities that previously had little hope of securing a property tax exemption due to their circumstances. With this new precedent, organizations serving vulnerable populations may now have a viable path to relief, even in situations where such claims were once considered unwinnable.

How Ontario’s ‘Endeavour Test’ limited charities’ access to property tax relief

Section 3(1)12(iii) of the Assessment Act (the “Act”) exempts:

land 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.

However, for decades, this exemption was narrowly interpreted, limiting access to property tax exemptions for legitimate charitable organizations on artificial grounds.

The Religious Hospitallers precedent

The 1998 Ontario Court of Appeal case of Religious Hospitallers of St. Joseph Housing Corp. v. Regional Assessment Commissioner (“Religious Hospitallers”) established the requirement for what is sometimes referred to as the “Endeavour Test” to determine whether a corporation is “organized for the relief of the poor.”

In that case, the applicant housing corporation owned 59 residential seniors’ units allocated pursuant to a rental plan approved by the Ministry of Housing. While the majority of the units were needs assessed for “deep core need” households, 20% were rented at market rate. The corporation’s charitable objects were limited to providing housing to persons of low or moderate income.

The Court did not decide whether those facts were sufficient to determine whether the tenants qualified as “poor,” but instead held a separate test applied to determine whether the corporation was “organized for the relief of the poor.” According to the Court, it must be “the corporation itself, by some form of endeavour of the corporation, which would provide the relief involved.”   

This requirement, the Court held, was not met where the corporation did little beyond owning the properties and did not engage in fundraising or actively manage the operations of the apartment complex. The fact that the housing was provided through rents or fees paid by the tenants themselves, along with government funding, was deemed insufficient to meet the “organized for relief of the poor” test.

This interpretation rejected and overturned

This restrictive interpretation was reconsidered and overturned in the recently released (June 2025) decision of a newly constituted panel of the Court of Appeal in Stamford Kiwanis Non-Profit Homes Inc. v. Municipal Property Assessment Corporation (“Stamford Kiwanis”). This was an unusual step for a court to take. Following the Court of Appeal’s protocol for overturning its own precedent, a five-judge panel was convened and unanimously held that Religious Hospitallers had been incorrectly decided.

In Stamford Kiwanis, both the application judge and the Divisional Court found themselves bound by the Religious Hospitallers’ “Endeavour Test” and denied the exemption sought by the applicant, an affordable housing provider, even though the Divisional Court expressed the view that Religious Hospitallers had been wrongly decided. Only a formal overturning of that decision would suffice. 

The Court of Appeal did overturn Religious Hospitallers, finding that it had improperly limited the scope and purpose of section 3(1)12(iii) of the Act by introducing a non-existent, unnecessary, and vague requirement of “some form of endeavour.”

At paragraph 93, the Court held:

In addition to being wrongly decided, the effect of the error is to undermine the laudable objective and intent of s. 3(1)12(iii) of the Act by limiting its ambit and introducing the foreign element of endeavour.

And at paragraph 95:

There is no need for any separate endeavour or evidence of private fundraising.

New legal standard simplifies access to property tax relief for Ontario charities

Following Stamford Kiwanis, the test for an exemption under section 3(1)12(iii) of the Act now requires that an applicant demonstrate that it:

(i) owns, uses and occupies the land;

(ii) is a charitable, non-profit philanthropic corporation;

(iii) is organized for the relief of the poor, which means: (a) the primary purpose or use of the subject property is relief of the poor, and (b) the corporation operates, at least in part, for the relief of the poor. The corporate objects may inform (a) and (b) but are not determinative. There must be an element of economic deprivation or need on the part of the corporation’s intended beneficiaries; and

(iv) the applicant must be supported in part by public funds (which has previously been determined to mean funding from government sources).

What does this mean for charities and non-profits?

The Stamford Kiwanis decision broadens the range of organizations that may qualify for a property tax exemption under section 3(1)12(iii) of the Act. The ambiguous “Endeavour Test” no longer applies.

If your organization serves (even in part) individuals or communities experiencing economic deprivation or need, you may now be eligible for the exemption, even if you were previously excluded.

If you are a non-profit or charitable organization and would like to discuss your eligibility for property tax exemptions, please reach out to a member of Miller Thomson’s Real Property Assessment and Taxation or Charities and Not-For-Profit Teams.