Payments in Lieu of Taxes

Federal PILTs - from a presentation at the St Edmunds Property Owners Annual General Meeting

 

PLITs or Payments in Lieu of Property Tax as you are probably aware have been recognized as an issue for about five years and over this time the municipality with the help of some SEPO members have reviewed the assessments of a variety of government properties in the municipality and crunched the numbers to attempt to understand this evaluation and how it compares to assessments of other private properties.

 

The goal of the exercise has been to determine if the evaluations are fair and if not to attempt to see that they are made so. Prior to this year some gains were made thanks to the work of some concerned residents and municipal staff in the Treasury Department.

 

Some municipal ratepayers have continued to express their concern and feel that we are still being treated unfairly by the Federal government.

 

Milt reported at he last council meeting that he met with some of the people from Public Works Canada while attending the AMO conference in Ottawa. Through this connection he has lately spoke to them along with our Municipal Treasurer. This conversation will be the subject of a report which will come to Council shortly.

 

Part of this information might be that the value per acre for the Federal and Provincial properties was calculated on a more Province-wide basis.

 

Presently...

 

  • All properties in the Municipality were reassessed for the 2013 taxation year

 

  • The new assessment will be phased-in over 4 years and all properties will reach their Current Value Assessment (CVA) in 2016

 

  • The large fluctuation in a few of the federal properties created a shortfall in the 2013 Federal PILTS

 

  • This happened because assessment increases are phased in over 4 years and decreases are recognized in the first year

 

  • The Municipality asked the Federal Government to consider going to the full CVA for 2013 as the phase-in tool was created to assist ratepayers in transitioning to the new assessment level (It was not meant to assist the Federal Government)

 

 

Points to Consider:

 

  • By going to full CVA in the first year, the Federal Government would have to do this for all properties across Canada – this would probably be a huge budget consideration

 

  • Their use of the phase-in means that the increases are being handled the same as they are in the private sector

 

  • A recent ruling by the Supreme Court of Canada supported an appeal by the Halifax Regional Municipality to address unfair assessment rules in the federal payments in lieu of taxes system. This ruling holds the federal government accountable for payments in lieu of taxes according to the same assessment rules that are applied to privately owned property. In other words, the assessed value of federally owned properties should reflect what the taxation valuation would be if the property were assessed privately.

 

  • Northern Bruce Peninsula is receiving commercial assessment values on the Federal properties within the National Parks boundaries as a result of the National Parks agreement made with the Township of St. Edmunds in 1987

 

  • In private hands, these properties would largely be assessed as residential

 

  • The commercial tax rate is higher than the residential rate and the sharing of revenue differs – the amount generated by the school board rate for commercial assessment is retained by the Municipality – the residential amount generated by the school board rate is shared with the school boards

 

  • To illustrate the difference, the 2012 Federal PILT share for the Municipality was $470,000. If all properties were assessed at the residential rate, the Municipality would have received $118,000

 

  • If private individuals placed a managed forest designation on these properties the Municipality would receive 25% of that amount or $29,500.

 

  • Some would argue that if the properties were developed, they would generate much higher residential assessments.

 

  • We currently do not provide services such as road maintenance and garbage pickup to the parks.

  • The overall assessment increase for Federal properties is approximately 22% when they reach full CVA

 

  • This increase is comparable to the overall assessment increase for all properties in the Municipality

 

Personally I feel that we are fortunate that the council of the day had the presence of mind to make that agreement with the Federal government to pay the commercial rate.

This obligation to us is unique in Canada as far as I know and valuable to us.

 

While it is true that during the phase-in process we will suffer a reduction in revenue, we will in two years begin to recover the loss.

 

As ratepayers and municipal leaders we have had to adjust to a steady decrease in grant money from all levels of upper tier governments. By comparison in 2008 the total revenue from grants was 37% of the budget compared to 15% in 2012. This adjustment has been difficult as demands increase along with cost of services.

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