Supreme Court rules that the federal government should pay its property taxes
like everyone else

OTTAWA, April 15 /CNW Telbec/ - In a unanimous decision today, the Supreme Court of Canada handed municipalities and property tax payers a win, by clearly and unequivocally stating that the federal government and its Crown corporations must pay for the services municipalities provide in the same way private property owners pay.

The court's ruling ended almost six years of legal efforts by the City of Montreal to force two federal Crown Corporations, the Canadian Broadcasting Corporation (CBC) and the Port of Montreal to pay fairly for the municipal services their properties receive in that city. The issue at the centre of the case: whether Crown Corporations should pay the same tax rate - or "payments-in-lieu-of-taxes" (PILT) - as other comparable, private property owners.

"Municipalities had a lot at stake in this case, and this ruling is a victory," said FCM CEO Brock Carlton. "Fair and predictable PILT revenues are crucial for municipalities struggling to deliver a growing range of services with just 8 cents of every tax dollar collected."

The PILT payments that federal departments and Crown Corporations make are worth $700 million dollars a year to municipal governments, and pay the costs of providing local services to these federally owned properties.

"This case was simply about fairness and predictability. Municipalities provide services to all properties within their boundaries, and obviously feel that all comparable properties, whether they are private or federally owned, should pay comparable fees, every year, without exception," said FCM's legal policy expert, Ottawa University Law professor Stéphane Emard-Chabot, who acted as an intervener before the court for the federation. "The decision provides clear judicial interpretation of the PILT Act. Now the federal government must ensure that all of its property managers, from St. John's to Victoria to Yellowknife, apply the court's guidelines and pay their PILTs so that municipalities aren't forced to resort to expensive legal actions to be paid what is owed."

"Private companies cannot dodge their property taxes," reminded Mr. Carlton. "This ruling gives municipalities assurance that as federal departments and Crown Corporations feel their budgets being pinched by the government's deficit reduction efforts, they won't be able to dodge their property tax obligations either."

SOURCE Federation of Canadian Municipalities

For further information: For further information: Eric Collard, (613) 907-6395 or e-mail

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Federation of Canadian Municipalities

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