Question Period Note: Payments in Lieu of Taxes

In support of local communities in the National Capital Region, and in alignment with federal legislation, the National Capital Commission’s (NCC) pays its fair share of Payments In Lieu of Taxes (PILT) to various municipalities where it owns real property on behalf of the Crown.

• The National Capital Commission is a Crown corporation that operates at arm’s length from the federal government and as such, it is solely responsible for decisions pertaining to Payments in Lieu of Taxes
  • The National Capital Commission has a productive and long-standing relationship with both the Municipality of Chelsea and the City of Gatineau, who play an important role in facilitating the visitor experience for Gatineau Park
  • The National Capital Commission has taken a principle-based, consistent, and collaborative approach to its response to the non-binding recommendations provided by the Dispute Advisory Panel on Payments in Lieu of Taxes
  • The National Capital Commission remains committed to upholding the Payment in Lieu of Taxes Act and will continue to engage with the Municipality of Chelsea and the City of Gatineau in the hopes of finding an amenable solution

Under Section 125 of the Constitution Act, 1867, the Government of Canada is exempt from municipal taxation. As a federal Agent Crown corporation, this exemption also applies to the NCC.

Since 1950, to demonstrate the Government of Canada’s commitment to supporting local communities, the federal government has adopted legislation that provides for the fair and equitable administration of PILT where it owns real property.

In support of municipalities, and as permitted under the National Capital Act, the NCC may and does pay its fair share of PILT to various municipalities in the National Capital Region. However, as per Article 16 of the Act, the NCC does not pay PILT on parks with the exception of Gatineau Park.

The Municipality of Chelsea and the City of Gatineau referred their PILT concerns with the NCC to a Dispute Advisory Panel (DAP). A DAP is a federal body responsible for making recommendations on PILT disputes. It is a recommendatory, not a judicial body, and its membership is appointed by the Governor in Council on the recommendation of the Minister of Public Services and Procurement.

The participation in a DAP process was an attempt to resolve outstanding questions relating to municipal assessments applied by the municipalities. In the Municipality of Chelsea alone, the NCC saw properties in Gatineau Park have a 58% increase in PILT applied to them between 2017 and 2019. The properties were assessed as though they had development value and could be sold for commercial purposes. However, the NCC has neither the intention nor the unilateral ability under federal law or its planning framework to sell Gatineau Park lands for development. Moreover, Chelsea’s own land-use plan formally categorizes many of these parcels as being land for conservation purposes.

The corporation is concerned with the impacts of a decision, both in financial terms as well as in principle, that would see its vast public conservation holdings, including but not limited to Gatineau Park, assessed and valued in this way. Furthermore, it is concerned with the impacts of such a decision on other federal custodians. For example, if the approach taken by the municipalities of Gatineau and Chelsea were to be applied across the entire province of Quebec, the impact on entities such as Parks Canada would be in the hundreds of millions.

The NCC has been in negotiations with the municipalities of Chelsea and Gatineau since July. In advance of an October meeting of the Chelsea Municipal Council, the NCC issued a letter to council members further detailing the offer made to the municipality. This letter has since been made public. In December 2021, Chelsea’s council voted unanimously to take the dispute with the NCC to federal court. The municipality has publicly indicated that it is seeking a total of $1.4 million in PILT since 2018 for the NCC’s lands in Gatineau Park.

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