TORONTO, Feb. 10 /CNW/ - The Toronto Port Authority (TPA) announced today
it has received notice from the City of Toronto that the City has refused to
accept the recommendations of the federal Dispute Advisory Panel regarding the
TPA's appropriate Payment in Lieu of Taxes ("PILTs") and that it has formally
applied for a judicial review by the Federal Court of Canada.
"The TPA is disappointed that the City of Toronto has chosen to prolong
the dispute over the property values used to calculate a Payment in Lieu of
Taxes," said Alan Paul, Acting President & Chief Executive Officer of the TPA.
The TPA has offered the City of Toronto a fair and equitable PILTs amount
since it became subject to the PILTs Act on June 7, 1999. However, the City
has decided to withhold funds payable to the TPA in accordance with its 2003
Settlement Agreement, which include past Operating and Capital amounts,
ongoing Capital Payments and Harbour User Fees.
On April 13, 2006, the City of Toronto applied to the Dispute Advisory
Panel. A hearing was held from February 25 to 28, 2008. On August 28, 2008,
the City of Toronto advised the TPA in a letter that it was withholding "$10
million" of funds it contractually owed to the TPA and that the funds "(have
been) set aside pending resolution of the dispute". The City's letter
continued: "As you know, the City is waiting for the decision from the Federal
PILTs Dispute Advisory Panel regarding the PILTs issues on the TPA's major
On January 5, 2009, the Dispute Advisory Panel released its Report on the
value of four properties, including the Toronto City Centre Airport, that were
in dispute between the TPA and the City of Toronto. As per the TPA press
release dated January 21, 2008, Mr. Paul advised that "it has always been the
TPA's intention to pay a PILTs amount to the City of Toronto, provided that it
is fair and reasonable". For the four properties reviewed by the Dispute
Advisory Panel, their recommendations would result in a PILTs payment of
$5.063 million for 1999 to 2008, inclusive. The City had been seeking $37.342
million for the same period.
The City is alleging that the Panel was biased against its expert
witness, that the panel incorrectly utilized certain information, and that the
Toronto City Centre Airport should be analyzed as a commercial property and
not as an airport.
"We're disappointed that the City has put us on a path which could
potentially result in many years of costly litigation." added Mr. Paul. "The
TPA is ready to pay its PILTs as part of an exchange of amounts owed between
the parties, but we have no choice other than to reply to the City's
Application to the Federal Court".
"The City originally requested a hearing before the Dispute Advisory
Panel, and are now challenging the findings of the Panel. This tactic will
only cost all of our stakeholders additional and unnecessary legal fees. The
City's energy and financial resources could otherwise be put towards
productive joint initiatives with the TPA, rather than using the Courts to
settle simple matters," added Mark McQueen, Chairman of the TPA Board of
Directors. "This isn't the only example. Just six weeks ago, an Ontario
Superior Court Judge completely dismissed the City's arguments as
'unreasonable' regarding the TPA's 2006 request regarding queuing lanes at the
Bathurst Street Ferry Terminal."
In that December 23, 2008, Court decision, the Judge directed the City to
immediately approve the TPA's early 2006 request to perform basic work to the
TPA's Bathurst Street lot. In that matter, the City used the court system to
delay a simple works project until early in 2009.
"The TPA would love to turn the page and move on from the historically
fractious relationship between our two entities, but the City needs to meet us
halfway," continued Mr. McQueen. "It remains our expectation that the City has
already formally set aside the more than $10 million in payments they've
withheld from the TPA, as per their written undertaking of August 2008."
The Panels' Report and a Backgrounder on PILTs were first made available
on the TPA website (www.torontoport.com) on January 21, 2009.
For further information: Alan Paul, Acting President and CEO, Toronto
Port Authority, (416) 863-2003