Hospital Prices Remain Largely Unhelpful.
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The federal government has won in court in its dispute with the City of Ottawa over the amount of payments in lieu of taxes (PILTs) for properties in the national capital.
A memo addressed to Mayor Mark Sutcliffe and members of council from Cyril Rogers, the city’s general manager and chief financial officer, late Thursday afternoon said a ruling issued by the Federal Court of Canada a day earlier had determined the federal government made a “reasonable” decision to pay a discounted rate for PILTs — what the feds pay instead of property tax to cover the cost of services they receives from the municipality since governments aren’t allowed to tax each other.
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“The city is reviewing the decision in detail and discussing with external counsel to determine next steps,” Rogers’ memo added.
“The City of Ottawa will continue to report on the financial impacts through the Disposition of Tax and Rate-Supported Operating Surplus/Deficit reports to the Finance and Corporate Services Committee.”
The Feb. 19 ruling by Justice Peter G. Pamel followed a hearing held on June 10, 2024. It also awarded court costs of $5,000 each to Public Services and Procurement Canada and Canada Post.
In August, Sutcliffe said federal PILTs had amounted to $162 million for the city in 2023. However, he added, that was $30 million less than the $192 million it was eight years previous. The decrease was due to several reasons, mainly that the feds were selling some properties while others were vacant and were valued for less.
Sutcliffe’s main complaint was that the federal government got to decide on its own how much its property was worth before applying the city’s tax rate to it. Under the Payment in Lieu of Taxes Act, the PILT “is the value that, in the opinion of the Minister of Public Services and Procurement, would be attributable if the property was taxable.”
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Public Services and Procurement Canada manages the federal payment in lieu of taxes budget, paying nearly $610 million to municipal and provincial governments in 2023, according to its website.
The City of Ottawa received by far the largest portion of that, $124 million, followed by Gatineau at $48.5 million and Dorval, Que., site of Pierre Elliott Trudeau Airport, at $35.3 million. (Sutcliffe said in August that Ottawa received $164 million, including PILTs from other organizations such as the National Capital Commission, Crown corporations such as Canada Post, and diplomatic properties, for example.)
PSPC said Ottawa received $119.6 million in PILT in 2022, $114.6 million in 2021, $124.8 million in 2020 and $122.7 million in 2019.
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