Prince Rupert town and port reach tax deal

by MM&D Online Staff

PRINCE RUPERT, BRITISH COLUMBIA — The City of Prince Rupert and the Prince Rupert Port Authority (PRPA) have agreed on a valuation of the vacant federal lands administered by PRPA, and the Payments In Lieu of Taxes (PILT) associated with them.

The City of Prince Rupert will receive a one-time payment of $2.6 million to reflect new valuations retroactive to 2007.  The City is in receipt of this sum via the payments advanced by the Prince Rupert Port Authority to the City of Prince Rupert in 2013 and 2014.

PRPA’s total (annual) payment in lieu of tax corresponding to 2014 was paid in July in the amount of $1.152 million directed to the City of Prince Rupert.

In addition to the PILT amounts corresponding to the amended valuations, PRPA also agreed to contribute to the expenses incurred by the City through its participation in the dispute resolution process.

“This represents the reasonable conclusion of months of work and close collaboration between representatives of the City and the Port Authority,” said Prince Rupert city manager Robert Long. “We recognize the significant economic benefits the Port of Prince Rupert brings to our community, and the payments in lieu of taxes represent a contribution to the financial resources of local municipalities in our area.”

Federal and provincial crown lands are specifically exempt from local taxation under the Constitution Act of 1867. However, the Government of Canada recognizes the services received from municipal governments, and that it needs to pay its fair share of the costs. A Payments In Lieu of Taxes (PILT) program has been in effect since 1950, ensuring that payments are made to local taxation authorities based on rates which would apply to federal property if it were taxable.

The PILT program applies to all federal properties throughout Canada, including those owned or administered by federal departments, post offices, and Port Authorities.

The City of Prince Rupert had disputed the valuations of several vacant port properties, and a formal review identified deficiencies in the valuation methodology of the appraiser engaged by PRPA.  Subsequent to the review, a second independent valuation of lands was completed by different appraisers engaged by PRPA.

The result of the revised land valuation is that the City of Prince Rupert received PILT payments that reflect a negotiated settlement between the parties.

“The growth and expansion of the port has always benefited from a strong and effective partnership between the City and the Port Authority, and we’re pleased we’ve been able to put this dispute behind us,” said Don Krusel, president & CEO of the Prince Rupert Port Authority. “PRPA and the City have been able to use the tools available to us to find a fair resolution to this issue, which allows us to once again align our efforts to welcome future opportunities and investments.”