City of Ottawa taking federal government to court over $22 million in underpayments
The City of Ottawa is taking the federal government and Canada Post to court over a $22-million shortfall in what it expected to collect in lieu of taxes for 2021 and 2022.
The Payments in Lieu of Taxes Act establishes a system to compensate municipalities to account for federal properties located within city boundaries.
The city said in a Federal Court filing that Ottawa is home to "a vast number" of federal properties that are immune from local taxes.
The city collects more than $170 million each year in lieu of taxes on federal property based on the provincial business education tax rate.
But after the province of Ontario reduced that tax rate to help businesses affected by COVID-19 shutdowns, the federal government used the lower rate to calculate what it owed.
In the court filing, the city argues the federal government's decision to include itself in the tax break should be invalid.
"It was not intended to provide such special reduced rates for federal and provincial properties that make Payments in Lieu of Taxes," said the court filing.
The documents say the city is seeking an additional $21.3 million from Public Services and Procurement Canada, more than $100,000 from the National Capital Commission and just shy of $975,000 from the Canada Post Corp.
Those amounts would make up the difference in what the city was expecting to receive based on the standard tax rate normally used to calculate the payments.
"The city relies upon these payments to pay for municipal services that these properties benefit from," the city said in the documents.
A dispute-resolution panel declined to make a ruling, saying the matter is not within its jurisdiction.
Ottawa is now asking the court to declare that the federal government needs to make the payments. Failing that, it's asking the court to grant an extension to allow the city to apply for a judicial review or to refer the case back to the dispute advisory panel for a ruling.
According to the court filing, the federal government argued to the panel that it does not have discretion to determine the rate used to calculate these payments.
"In addition, there is a need to ensure fair and equitable treatment across the country for all payment in lieu of taxes recipients," the government wrote in a letter to the city back in August.
Ottawa's city council is scheduled to hold a special meeting Feb. 1 on its draft operating and capital budget.
This report by The Canadian Press was first published Jan. 25, 2023.
------
This story was produced with the financial assistance of the Meta and Canadian Press News Fellowship.
CTVNews.ca Top Stories
Indian envoy warns of 'big red line,' days after charges laid in Nijjar case
India's envoy to Canada insists relations between the two countries are positive overall, despite what he describes as 'a lot of noise.'
Stormy Daniels describes meeting Trump during occasionally graphic testimony in hush money trial
With Donald Trump sitting just feet away, Stormy Daniels testified Tuesday at the former president's hush money trial about a sexual encounter the porn actor says they had in 2006 that resulted in her being paid to keep silent during the presidential race 10 years later.
U.S. paused bomb shipment to Israel to signal concerns over Rafah invasion, official says
The U.S. paused a shipment of bombs to Israel last week over concerns that Israel was approaching a decision on launching a full-scale assault on the southern Gaza city of Rafah against the wishes of the U.S.
Former homicide detective explains how police will investigate shooting outside Drake's Bridle Path mansion
Footage from dozens of security cameras in the area of Drake’s Bridle Path mansion could be the key to identifying the suspect responsible for shooting and seriously injuring a security guard outside the rapper’s sprawling home early Tuesday morning, a former Toronto homicide detective says.
Northern Ont. woman makes 'eggstraordinary' find
A chicken farmer near Mattawa made an 'eggstraordinary' find Friday morning when she discovered one of her hens laid an egg close to three times the size of an average large chicken egg.
Susan Buckner, who played spirited cheerleader Patty Simcox in 'Grease,' dead at 72
Susan Buckner, best known for playing peppy Rydell High School cheerleader Patty Simcox in the 1978 classic movie musical 'Grease,' has died. She was 72.
Jeremy Skibicki has 'uphill battle' to prove he's not criminally responsible in Winnipeg killings: legal analysts
Accused killer Jeremy Skibicki could have a challenging time convincing a judge that he is not criminally responsible for the deaths of four Indigenous women, a legal analyst says.
Bye-bye bag fee: Calgary repeals single-use bylaw
A Calgary bylaw requiring businesses to charge a minimum bag fee and only provide single-use items when requested has officially been tossed.
Alcohol believed to be a factor in boating incident after 2 men die: N.S. RCMP
Two Nova Scotia men are dead after a boat they were travelling in sank in the Annapolis River in Granville Centre, N.S., on Monday.