City's court challenge of federal tax-like payments dismissed
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A federal court has dealt a blow to Mayor Mark Sutcliffe's Fairness for Ottawa campaign, dismissing the city's argument that it's getting shortchanged on payments for servicing tax-exempt government buildings.
The City of Ottawa applied to federal court to review the situation and side with it — restoring roughly $22 million in what are called payments in lieu of taxes or PILTs.
It said the federal government took advantage of a COVID-era provincial tax break meant to provide relief to struggling businesses.
But Justice Panagiotis Pamel found "nothing unreasonable."
Public Services and Procurement Canada (PSPC) argued it was compelled to pay the lower amount by federal statute. It said the payments must reflect what a private property owner would be charged — and the judge agreed.
"Ottawa seems to be trying to fit a square peg into a round hole on the coattails of statutory intent and purpose," Pamel wrote in his Wednesday Federal Court decision. "The starting point should be the text of the PILT Act itself."
WATCH | How Ottawa relies on tax-like payments from the federal government:
Court battle over federal government building taxes could leave taxpayers on the hook
3 months ago
Duration 3:09
What are PILTs?
The federal and provincial governments are constitutionally exempt from being taxed by municipalities, but they use the PILT Act to calculate similar 'voluntary' payments.
Ottawa has the most, and the most valuable, federal properties of any city and relies on the annual revenue.
Just like with any private property, these payments are calculated by multiplying the value of a property by the applicable tax rate.
But governments can unilaterally adjust those calculations and pay less.
That's what happened in this case, where PSPC lowered its payments to match a discounted tax rate set by the provincial government and collected by cities — an unexpected "windfall" for the federal government that came at the city's expense, according to Ottawa's legal team.
Ontario had lowered the rate as an olive branch for businesses during the pandemic, but asked the federal government and Crown corporations to continue paying the previous, higher, rate.
PSPC said it could not.
Pamel noted in his written decision that there was no "bad faith" by the province, which itself paid the higher PILT rate.
He laid out why Ottawa is "understandably unhappy," but ultimately said the court cannot decide the case based on the provincial government's intent.
"The city is asking me to read into the legislation something that is not there," Pamel said.
Multi-million dollar hole to fill
The Ontario government has stepped in to provide the city with $35 million to make up for three years of lower payments. It's said it will not be providing any additional money.
Staff said last fall that the shortfall in educational taxes will add up to $140 million over the next decade, with court documents suggesting the whole may need to be filled with a property tax hike to Ottawa residents of as much as 1.5 per cent.
The City of Ottawa said in a statement that it's still reviewing the decision and considering its next steps. PSPC did not provide a response before deadline.
The city has other PILT-related disputes.
It remains in negotiations with the National Capital Commission over disagreements related to the agency's declaration that a raft of properties are parks or pathways — a move that makes them exempt from tax-like payments.
The mayor has been lobbying the federal government to address the city's position since last summer as part of his Fairness for Ottawa campaign.
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Winnipeg Free Press
a day ago
- Winnipeg Free Press
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Toronto Star
a day ago
- Toronto Star
Bank of Canada head Tiff Macklem says mandate should evolve in a ‘shock-prone' world
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But he said the Bank of Canada needs to be running a more 'nuanced playbook' now to respond to some increasingly common shocks: supply chain disruptions, trade conflicts and extreme weather to name a few. An overheating economy running up against a supply disruption is the kind of inflationary fire Macklem is trying to avoid in this latest crisis. 'The economy does not work well when inflation is high,' he said. 'And the primary role of the Bank of Canada is to ensure that Canadians maintain confidence in price stability. That's all we can do for the Canadian economy. That's what we can do for Canadians. And that's what we're focused on.' ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW Later in the day on Wednesday, the Edmonton Oilers took Game 1 of the Stanley Cup finals. The Canadian team was down but roared back to win 4-3 in overtime. It's still early in the Bank of Canada's response to the latest global shock. But with any luck, Macklem's team might also get a leg up with lessons learned the last time they faced big odds. This report by The Canadian Press was first published June 7, 2025. Politics Headlines Newsletter Get the latest news and unmatched insights in your inbox every evening Error! Sorry, there was an error processing your request. There was a problem with the recaptcha. Please try again. Please enter a valid email address. Sign Up Yes, I'd also like to receive customized content suggestions and promotional messages from the Star. You may unsubscribe at any time. By signing up, you agree to our terms of use and privacy policy. This site is protected by reCAPTCHA and the Google privacy policy and terms of service apply. Politics Headlines Newsletter You're signed up! You'll start getting Politics Headlines in your inbox soon. Want more of the latest from us? Sign up for more at our newsletter page.
Vancouver Sun
2 days ago
- Vancouver Sun
Bank of Canada head Tiff Macklem says mandate should evolve in a 'shock-prone' world
OTTAWA — Tiff Macklem is wearing an Edmonton Oilers pin as he reflects on coming very close to beating big odds. It's a significant day for the governor of the Bank of Canada. He's just laid out his reasons to the entire country and a global audience for keeping the central bank's benchmark interest rate steady for a second straight time. That night is also Game 1 of the NHL's Stanley Cup finals. Macklem ends his press conference with a hearty 'Go Oilers!' It's a rematch from last year's heartbreak, when the Oilers came oh-so-close to mounting a seemingly impossible four-game comeback against the Florida Panthers, only to fall short by a single goal in Game 7. Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. Macklem, too, was almost safe to declare victory last year. He had just about secured a coveted 'soft landing' for Canada's economy — a rare feat that sees restrictive monetary policy bring down surging levels of inflation without tipping the economy into a prolonged downturn. 'We got inflation down. We didn't cause a recession,' Macklem said in an interview with The Canadian Press after the rate announcement Wednesday. 'And, to be frank, until President (Donald) Trump started threatening the economy with new tariffs, we were actually seeing growth pick up.' Fresh out of one crisis, the central bank now must contend with another in U.S. tariffs. Five years into his tenure as head of the Bank of Canada, Macklem said he sees the central bank's role in stickhandling the economy — as well as Canada's role on the world stage — evolving. Many Canadians have become more familiar with the Bank of Canada in recent years. After the COVID-19 pandemic recovery ignited inflation, the central bank's rapid tightening cycle and subsequent rate cuts were top-line news for anxious Canadians stressed about rising prices and borrowing costs. That was all in pursuit of meeting the central bank's inflation target of two per cent, part of a mandate from the federal government that's up for review next year. Macklem said the past few years have led the Bank of Canada to scrutinize some of its metrics, like core inflation and how it responds to supply shocks in the economy. But he defends keeping the bank's inflation target, particularly at a time of global upheaval. 'Our flexible inflation targeting framework has just been through the biggest test it's ever had in the 30 years since we announced the inflation target,' he said. 'I'm not going to pretend it's been an easy few years for anybody. But I think the framework has performed well.' Macklem said, however, that he sees room to build out the mandate to address other areas of concern from Canadians, such as housing affordability. Whether it's the high cost of rent or a mortgage, or surging prices for groceries and vehicles, Macklem said the past few years have been eye-opening to Canadians who weren't around the last time inflation hit double digits in the 1980s. 'Unfortunately, a whole new generation of Canadians now know what inflation feels like, and they didn't like it one bit,' he said. Monetary policy itself can't make homes more affordable, he noted — in a nutshell, high interest rates make mortgages more expensive while low rates can push up the price of housing itself because they stoke demand. But Macklem said one of the things he's reflecting on is that inflation can get worse when the economy isn't operating at its potential or when it's facing great disruption. 'There is a role for monetary policy to smooth out some of that adjustment — support the economy while ensuring that inflation is well-controlled.' He didn't offer suggestions on how the mandate might expand to address housing affordability specifically, but said 'the work is ongoing' and will be settled in meetings with the federal government next year. Right now, he's trying to make sure that the economic impacts from Canada's tariff dispute with the United States don't result in prolonged inflation. The Bank of Canada is not alone in debating how monetary policy ought to respond in what Macklem called a more 'shock-prone' world. The G7 Finance Ministers' Summit in Kananaskis, Alta., last month also featured roundtables with the bloc's central bankers. Conversations at the summit were 'candid,' Macklem said, and though the nations issued a joint statement at the close of the event, that doesn't mean they agreed on everything. 'International co-operation, to be honest, has never been easy. It is particularly difficult right now, but that doesn't make it less important. That makes it more important,' he said. 'I do think Canada, as the chair of the G7, has a leadership role to play.' The Bank of Canada is also changing the way it has conversations with Canadians and the kind of data it considers. A day after the June interest rate decision, deputy governor Sharon Kozicki told a Toronto business crowd how the central bank is using data more nimbly, relying heavily on surveys and more granular information to make monetary policy decisions in an uncertain time. These sources offer a faster way to see what's happening on the ground in the economy than traditional statistical models allow. Macklem said the central bank would previously have dismissed most supply shocks as transitory — likely to pass without the need for central bank adjustments, such as rising and falling oil prices. But he said the Bank of Canada needs to be running a more 'nuanced playbook' now to respond to some increasingly common shocks: supply chain disruptions, trade conflicts and extreme weather to name a few. An overheating economy running up against a supply disruption is the kind of inflationary fire Macklem is trying to avoid in this latest crisis. 'The economy does not work well when inflation is high,' he said. 'And the primary role of the Bank of Canada is to ensure that Canadians maintain confidence in price stability. That's all we can do for the Canadian economy. That's what we can do for Canadians. And that's what we're focused on.' Later in the day on Wednesday, the Edmonton Oilers took Game 1 of the Stanley Cup finals. The Canadian team was down but roared back to win 4-3 in overtime. It's still early in the Bank of Canada's response to the latest global shock. But with any luck, Macklem's team might also get a leg up with lessons learned the last time they faced big odds. 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