Payments in Lieu of Taxes Act (R.S.C., 1985, c. M-13)

Purpose of Act

Marginal note:Purpose

2.1 The purpose of this Act is to provide for the fair and equitable administration of payments in lieu of taxes.

Authority to Make Payments

Marginal note:Authority to make payments

• 3 (1) The Minister may, on receipt of an application in a form provided or approved by the Minister, make a payment out of the Consolidated Revenue Fund to a taxing authority applying for it

  • (a) in lieu of a real property tax for a taxation year, and

  • (b) in lieu of a frontage or area tax

  in respect of federal property situated within the area in which the taxing authority has the power to levy and collect the real property tax or the frontage or area tax.

• Marginal note:Delayed payments

  (1.1) If the Minister is of the opinion that a payment under subsection (1) or part of one has been unreasonably delayed, the Minister may supplement the payment.

• Marginal note:Maximum payable

  (1.2) The supplement shall not exceed the product obtained by multiplying the amount not paid by the rate of interest prescribed for the purpose of section 155.1 of the Financial Administration Act, calculated over the period that, in the opinion of the Minister, the payment has been delayed.

• Marginal note:Authority to make payments

  (2) Notwithstanding anything in this Act, if real property or immovables are prescribed to be included in the definition federal property under paragraph 9(1)(d) or (e), a payment may be made in respect of that property for the entire taxation year in which the prescription is made.

• Marginal note:Application to Schedule I corporations

  (3) In respect of a corporation included in Schedule I, a payment may be made under this section only in respect of the real property or immovables of the corporation specified in that Schedule or prescribed by the Governor in Council.

• Marginal note:Taxing authority

  (4) For the purpose of subsection (1), a taxing authority in respect of federal property described in paragraph 2(3)(d) means a council, band or first nation referred to in any of paragraphs (b) to (e) of the definition taxing authority in subsection 2(1).

Marginal note:Payments for leased property

3.1 Real property and immovables referred to in paragraph 2(3)(h) are deemed to be federal property for a taxation year if

• (a) as of the day following the last day of the taxation year, all or part of the real property tax or the frontage or area tax on the property for that taxation year remains unpaid; and

• (b) the Minister is of the opinion that the taxing authority has made all reasonable efforts to collect the tax and there is no likelihood that the authority will ever be able to collect it.

Calculation of Payments

Marginal note:Payments in lieu of real property tax

• 4 (1) Subject to subsections (2) and (3) and 5(1) and (2), a payment referred to in paragraph 3(1)(a) shall not exceed the product of

  • (a) the effective rate in the taxation year applicable to the federal property in respect of which the payment may be made, and

  • (b) the property value in the taxation year of that federal property.

• Marginal note:Rate for school purposes

  (2) Where all or part of the real property tax levied by a taxing authority in a taxation year is for school purposes and is levied at different rates

  • (a) for taxpayers of different religious denominations, or

  • (b) for taxpayers of different religious denominations and for different classes of taxable property,

  there shall be substituted for the effective rate referred to in paragraph (1)(a) a rate equal to the rate calculated in accordance with subsection (3).

• Marginal note:Calculation of rate to be substituted

  (3) For the purposes of subsection (2), the rate substituted for the effective rate referred to in paragraph (1)(a) shall be a rate equal to the aggregate of that part of the effective rate in the taxation year that is used in determining the amount of the real property tax that is levied for purposes other than school purposes, and

  • (a) if paragraph (2)(a) applies, a rate for school purposes determined by dividing

    • (i) the portion of the real property tax levied for school purposes by the taxing authority in the taxation year,

    by

    • (ii) the assessed value of all taxable property under the jurisdiction of the taxing authority in respect of which such portion of the real property tax for school purposes is levied in the taxation year, or

  • (b) if paragraph (2)(b) applies, a rate for school purposes for each class of taxable property determined by dividing

    • (i) the portion of the real property tax levied for school purposes by the taxing authority in respect of property of that class in the taxation year,

    by

    • (ii) the assessed value of all taxable property of that class under the jurisdiction of the taxing authority in respect of which that portion of the real property tax for school purposes is levied in the taxation year.

Marginal note:Full amount of payment not budgeted

• 5 (1) If, for any taxation year,

  • (a) a real property tax rate is established by a taxing authority without taking into account all federal property situated within the area in which the taxing authority has the power to levy and collect a real property tax, and

  • (b) the property value of the federal property not taken into account exceeds 25 per cent of the total assessed value of taxable property situated within the area in which the taxing authority has the power to levy and collect a real property tax,

  the Minister may, in determining the amount of any payment to that taxing authority, make an adjustment in the effective rate or in any portion of it so that the payment will not exceed the amount described in subsection (2).

• Marginal note:The amount over which a grant will not exceed

  (2) The amount referred to in subsection (1) is the amount that would have been determined by the Minister if the property value referred to in paragraph (1)(b) that is in excess of twenty-five per cent of the total assessed value of the taxable property situated within the area in which the taxing authority referred to in subsection (1) has the power to levy and collect a real property tax, had been taken into account by the taxing authority in establishing the real property tax rate for the taxation year.

• Marginal note:Presumption

  (3) Where one authority collects a real property tax that is established by another authority, the authority that collects the tax shall, for the purposes of subsections (1) and (2), be deemed to be the authority that establishes the real property tax rate.

Marginal note:Payments in lieu of frontage or area tax

• 6 (1) A payment referred to in paragraph 3(1)(b) shall not exceed the product of

  • (a) the effective rate applicable to federal property in respect of which the payment may be made, and

  • (b) the property dimension of that federal property.

• Marginal note:Option

  (2) If a frontage or area tax is payable over a period of more than one year, the Minister may make a payment in lieu of that tax in annual instalments, together with interest, or in a lump sum without interest.

Marginal note:Deductions

7 In determining the amount of a payment for a taxation year under paragraph 3(1)(a), there may be deducted

• (a) if there is in effect a special arrangement for the provision or financing of an educational service by Her Majesty in right of Canada, the amount established by that arrangement;

• (b) if there is in effect a special arrangement for an alternative means of compensating a taxing authority, or a body on behalf of which the authority collects a real property tax, for providing a service, the amount established by that arrangement;

• (c) if a taxing authority, or a body on behalf of which the authority collects a real property tax, is, in the opinion of the Minister, unable or unwilling to provide federal property with a service, and no special arrangement exists, an amount that, in the opinion of the Minister, does not exceed reasonable expenditures incurred or expected to be incurred by Her Majesty in right of Canada to provide the service; and

• (d) an amount that, in the opinion of the Minister, is equal to any cancellation, reduction or refund in respect of a real property tax that the Minister considers would be applicable to the taxation year in respect of federal property if it were taxable property.

Marginal note:Deductions

8 In determining the amount of a payment under paragraph 3(1)(b), there may be deducted an amount that, in the opinion of the Minister, does not exceed reasonable expenditures incurred or expected to be incurred by Her Majesty in right of Canada to provide federal property with the service or work to which the frontage or area tax is related.

Regulations

Marginal note:Regulations by Governor in Council

• 9 (1) The Governor in Council may make regulations for carrying out the purposes and provisions of this Act and, without restricting the generality of the foregoing, may make regulations

  • (a) adding to or deleting from Schedule I any corporation established by or under an Act of Parliament or performing a function on behalf of the Government of Canada that is included in Schedule III and prescribing the real property or immovables of that corporation that are to be included in Schedule I;

  • (b) prescribing criteria for the purposes of paragraph (b) of the definition other attribute in subsection 2(1);

  • (c) adding to or deleting from Schedule II any structure, work, machinery or equipment to be excluded from the definition federal property under subsection 2(3);

  • (d) [Repealed, 2000, c. 8, s. 10]

  • (e) prescribing the real property and immovables referred to in paragraph 2(3)(h) that are to be included in the definition federal property in subsection 2(1);

  • (f) respecting any payment that may be made in lieu of a real property tax or a frontage or area tax by any corporation included in Schedule III or IV and, without limiting the generality of the foregoing, providing that any payment that may be made shall be determined on a basis at least equivalent to that provided in this Act;

  • (g) respecting any payment that may be made in lieu of a business occupancy tax by every corporation included in Schedule IV;

  • (g.1) providing that, in respect of a taxation year starting on or after January 1, 2000, subsections 3(1.1) and (1.2) and paragraph 3.1(b) apply to corporations included in Schedule III or IV, with any modifications that the circumstances require, in respect of payments in lieu of a real property tax and a frontage or area tax and, in the case of a corporation included in Schedule IV, payments in lieu of a business occupancy tax;

  • (g.2) providing that section 11.1 applies to corporations included in Schedule III or IV, with any modifications that the circumstances require; and

  • (h) adding to or deleting from Schedule III or IV any corporation established by or under an Act of Parliament or performing a function on behalf of the Government of Canada.

• Marginal note:Proposed regulations to be published

  (2) Subject to subsection (3), a copy of each regulation that the Governor in Council proposes to make under subsection (1) shall be published in the Canada Gazette and a reasonable opportunity shall be afforded to interested persons to make representations to the Minister with respect thereto.

• Marginal note:Single publication required

  (3) No proposed regulation need be published more than once under subsection (2) whether or not it is altered or amended after that publication as a result of representations made by interested persons as provided in that subsection.