Question Period Note: Payments in Lieu of Taxes Program

This note provides information to support general questions on the Payments in Lieu of Taxes Program.

• The Government of Canada supports local communities by ensuring the fair and equitable administration of Payments in Lieu of Taxes where it owns real property
  • Payments are based on the principle of fairness respecting both the taxing authorities and the federal government. They are equitable in comparison to those made by other property owners
  • If a taxing authority disagrees with the payment made by Public Services and Procurement, it may request a review by the Payments in Lieu of Taxes Dispute Advisory Panel or a Judicial Review by the Federal Court of Canada

The Government of Canada is not subject to real property tax under the Constitution Act. However, under the Payments in Lieu of Taxes Act, it makes voluntary payments to taxing authorities to contribute to the cost of local government where federal property is located.

Payments in lieu of taxes are calculated based on values and tax rates which would apply to the federal property if it were taxable and respect provincial and municipal assessment taxation legislation. Custodian departments reimburse Public Services and Procurement Canada for payments made on their behalf. Crown corporations administer their own Payments in Lieu of Taxes Programs.

• The Payments in Lieu of Taxes program is administered by Public Services and Procurement Canada on behalf of all custodian departments under the authority of the Payments in Lieu of Taxes Act
  • Annually, approximately $628 million in payments are made on 14,000 federal properties to 1,100 taxing authorities across Canada