Ontario Home Electricity Rebates

Bill 117, an Ontario Act to amend the Income Tax Act to provide for an Ontario Home Electricity Payment, received Royal Assent on June 22, 2006, and came into force on that same date.

The enactment of section 8.6.1 of the Income Tax Act provides for a one-time only Ontario home electricity payment (the "Home Electricity Payment") by the Ontario Minister of Finance to low-income individuals. In order to be eligible to receive the payment, individuals must file their 2005 personal income tax return on or before December 31, 2006, and qualify for an Ontario property tax credit for 2005. It is not necessary to apply for the Ontario Home Electricity Payment in order to receive it.

The Home Electricity Payment is a one-time payment being provided to the low income individuals and families to assist them with the effects of high electricity costs. The amount of the Home Electricity Payment is $60 for a single person whose net annual income for 2005 does not exceed $14,000 and $120 for a family whose family net annual income for 2005 does not exceed $23,000. The amount of the payment is proportionately reduced for net incomes above those amounts with no payment being made to a single person whose net income is $20,000 or above or to a family whose family net income is $35,000 or above.

Unlike the Alberta Resource Rebate Statutes Amendment Act of December 2005 which specifically provided in the legislation that the rebate amounts were exempt from execution or seizure and could not be assigned except under the Bankruptcy and Insolvency Act, this legislation is silent on whether the payment is seizable by the bankruptcy trustee or assignable by the recipient in the case of bankruptcy. The Ontario Home Electricity Payment is similar to the energy rebate that was paid to low income individuals under the Federal Energy Costs Assistance Measures Act in 2005. The legislation that provides for the payment in both cases is silent on the question of assignability and seizability of the payment in bankruptcy.

As with other similar programs in the past, Canada Revenue Agency ("CRA") is involved in administering the program and in issuing the cheques to eligible individuals. Where the eligible individual is an undischarged bankrupt, CRA has advised that they will send the cheques to the bankruptcy trustee.

It is the view of the Office of the Superintendent of Bankruptcy (the "OSB") that the Home Electricity Payment should be treated as if it were excluded from the property of the bankrupt that is divisible amongst the creditors. The Home Electricity Payment should, as a matter of social policy, be given to the bankrupt to offset necessary living expenses. Because this payment is a one-time occurrence and is not a recurring payment, the OSB is issuing this position paper instead of dealing with the issue by means of a regulation.