Community Air Press Release, Thursday June 24, 2010
 
In a decision released today, the Federal Court of Canada has overturned the decision of the federal government’s PILTs Dispute Advisory Panel that reduced the amount claimed by the City for property taxes (Payments in Lieu of Taxes, as the TPA is a federal agency). In essence, the Federal Court's decision upholds the City’s insistence that the TPA to pay its fair share of municipal property taxes.
It sent the issue back to that Dispute Advisory Panel to calculate the value of the TPA’s properties based as if the federal property were taxable property belonging to a private owner, and awarded costs to the City.
The FCC decision is at cas-ncr-nter03.cas-satj.gc.ca/rss/TORONTO.EN.pdf
It includes this, at paragraph 77-78:
However, in this case, the problematic areas are significant and multiple. They cover areas of jurisdiction, of law and of procedural fairness. They include a failure to appreciate the significance of evidence and they contain conclusions as to specific properties which are unreasonable. Further, if the Panel had properly considered the City’s evidence and its import, its conclusions on specific properties might well have been different.
Considered as a whole, the Court concludes that it would be preferable to commence the process again. A proper PILT determination is potentially a bedrock for the future amounts and provides stability and certainty to both parties.
The PILTs Dispute Advisory Panel stated in its January 2009 decision,
16. The City's values of the Airport for PILT purposes are:
2004/5 - $39,057,770
2006/7 - $42,944,060
17. The position of the Port Authority is that the value in exchange of the Airport is nominal.
18. It is an understatement that they are far apart.
Based on current property tax rates (~3.6%), and the City’s valuation, the TPA should have been paying $1.4 million per year to the City – just for the Airport lands - or $15,400,000 for the years since 1999.
The 2008 TPA financial statements reveal that all property taxes claimed as owing by the TPA to the City for the years 1999 to 2008 were $39, 588,000. Over those eleven years since the TPA was first imposed on the City, the TPA has paid the City a total of just $7 million, for all of its properties.
Last April 15, the Supreme Court of Canada decision in Montreal Port Authority v. City of Montreal, set out the principles for payment of PILTs by federal agencies like the TPA. That decision was adopted by the Court today. Our media statement on the SCC decision included this:
It is important for the TPA to pay its taxes, like any other property owner. This decision affirms that obligation. This is very good news for the City of Toronto, and great news for our waterfront.
This is Lisa Raitt’s legacy – she was the CEO when the decision was made to not pay property taxes to the City, and instead to do everything possible to avoid paying them, anticipating that the City would not put up a fight.
To the City’s credit, it did put up a fight, steadily and doggedly pursuing the TPA through the labyrinthian PILTs appeal process within the Federal government, and joining in this appeal by the City of Montreal as a intervenor.
This very likely puts paid to any thought of the Island Airport tunnel, as the TPA will be scrambling to sell assets to pay those arrears. It also adds major new costs to Porter’s operation, as the property taxes payable on 215 acres of prime downtown property will be very significant.
Now the Federal Court has told the TPA that it must follow the Montreal decision.
CommunityAIR calls upon the TPA to stop being a tax deadbeat, and pay up!