When the tax man becomes the grim reaper

By MPP Toby Barrett

‘The only sure things in life are death and taxes’. But, in Ontario, we must also regrettably add high government taxes after you’re dead.

Ontario residents pay taxes their entire lives, on hard work and savings, on income and investments. We also pay taxes on the things we buy and cherish – be it the car in the garage or the painting on the wall. The people of Ontario recognize the importance of certain taxes to pay for the services we need and to support our most vulnerable. But a new approach now focusses on an accelerated gathering of taxes after death.

Ontario’s estate death tax amounts to a tax on a lifetime of hard work and sacrifice. It punishes families who have been saving for the future and the future of their family. It punishes people who have spent their lives building a farm or business from the ground up. A person’s assets should be available for their children, or charitable causes they hold dear, not taxed and then re-taxed upon death.

As of Jan. 1, 2015, executors are required to file an Estate Information Return with 90 days after an estate certificate is issued by the court. What’s new is the appraisal of all estate property, from real estate to automobiles to personal property, must be done by a professional evaluator. And, if the return is not filed before 90 days, the executor can face penalties ranging from heavy fines to imprisonment for up to two years.

On the other hand, the Ministry of Finance may take up to four years to review estate returns and conduct audits and can assess if further tax is payable even after an estate has been distributed.

These changes are cold-hearted and not rooted in reality. Most often the executor is the child of the deceased. When more and more people are leaving Ontario to find jobs, these changes have left families scrambling to file paperwork in their busy lives while still reeling from the loss of a loved one.

A Private Member’s Bill introduced by my caucus colleague Monte McNaughton aimed to change all of this. McNaughton’s bill would eliminate the 90-day deadline, eliminate taxes on estates valued at less than $50,000 value, eliminate punitive penalties for breaches of the act, remove taxes on charitable donations and cap the Estate Administration Tax at $3,250. Unfortunately, the Liberal and NDP vote killed his proposed legislation.

Grieving families deserve compassion and peace of mind, not the taxman at their door demanding an immediate cataloguing of their loved one’s belongings.

Like they say, you can’t take it with you – but you certainly don’t want it taken from your heirs.

The provincial government claims these reason for these changes is to protect against fraud through the undervaluation of property. However, the deliberate undervaluation of the value of an estate is already legislated as illegal activity. We in the Official Opposition see it as a cash grab to support government waste and out-of-control spending.

Instead of turning its back on grieving widows and children, government should be providing support. That’s why MPP McNaughton will continue to pressure government to show more compassion in their death tax collection process.

Ontario’s Opposition will continue to work to eliminate the abusive aspects and punitive nature of Ontario’s Estate Administration Tax.