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

Short Title

Marginal note:Short title

1 This Act may be cited as the Payments in Lieu of Taxes Act.

Interpretation

Marginal note:Definitions

• 2 (1) In this Act,

  assessed dimension

  assessed dimension means the frontage, area, other dimension or other attribute of real property or immovables established by an assessment authority for the purpose of computing a frontage or area tax; (dimensions fiscales)

  assessed value

  assessed value means the value established for any real property or immovable by an assessment authority for the purpose of computing a real property tax; (valeur fiscale)

  assessment authority

  assessment authority means an authority that has power by or under an Act of Parliament or the legislature of a province to establish the assessed dimension or assessed value of real property or immovables; (autorité évaluatrice)

  business occupancy tax

  business occupancy tax means a tax levied on occupants in respect of their use or occupation of real property or immovables for the purpose of or in connection with a business; (taxe d’occupation commerciale)

  department

  department means

  • (a) any department named in Schedule I to the Financial Administration Act,

  • (a.1) any division or branch of the federal public administration named in Schedule I.1 to that Act,

  • (a.2) any commission under the Inquiries Act designated as a department for the purposes of the Financial Administration Act,

  • (b) any corporation established by or under an Act of Parliament or performing a function on behalf of the Government of Canada included in Schedule I to this Act; (ministères)

  effective rate

  effective rate means the rate of real property tax or of frontage or area tax that, in the opinion of the Minister, would be applicable to any federal property if that property were taxable property; (taux effectif)

  federal property

  federal property means, subject to subsection (3),

  • (a) real property and immovables owned by Her Majesty in right of Canada that are under the administration of a minister of the Crown,

  • (b) real property and immovables owned by Her Majesty in right of Canada that are, by virtue of a lease to a corporation included in Schedule III or IV, under the management, charge and direction of that corporation,

  • (c) immovables held under emphyteusis by Her Majesty in right of Canada that are under the administration of a minister of the Crown,

  • (d) a building owned by Her Majesty in right of Canada that is under the administration of a minister of the Crown and that is situated on tax exempt land owned by a person other than Her Majesty in right of Canada or administered and controlled by Her Majesty in right of a province, and

  • (e) real property and immovables occupied or used by a minister of the Crown and administered and controlled by Her Majesty in right of a province; (propriété fédérale)

  frontage or area tax

  frontage or area tax means any tax levied on the owners of real property or immovables that is computed by applying a rate to all or part of the assessed dimension of the property and includes any tax levied on the owners of real property or immovables that is in the nature of a local improvement tax, a development tax or a redevelopment tax, but does not include a tax in respect of mineral rights; (impôt sur la façade ou sur la superficie)

  Minister

  Minister means the Minister of Public Works and Government Services; (ministre)

  minister of the Crown

  minister of the Crown means a member of the Queen’s Privy Council for Canada in that member’s capacity of managing and directing or having responsibility for a department; (ministre fédéral)

  other attribute

  other attribute includes

  • (a) in relation to a tax levy for the purpose of financing all or part of the capital cost of a service to real property or immovables,

    • (i) the actual or estimated cost of constructing a new building,

    • (ii) the number of rooms, living units or beds in a building, or

    • (iii) the number of persons in occupancy of a building, and

  • (b) in relation to a tax levy for the purpose of financing all or part of the operating cost of a service to real property or immovables, any prescribed criteria; (autre élément)

  prescribed

  prescribed means prescribed by regulations made by the Governor in Council under section 9; (Version anglaise seulement)

  property dimension

  property dimension means the frontage, area, other dimension or other attribute that, in the opinion of the Minister, would be established by an assessment authority in respect of federal property as the basis for computing the amount of any frontage or area tax that would be applicable to that property if it were taxable property; (dimensions effectives)

  property value

  property value means the value that, in the opinion of the Minister, would be attributable by an assessment authority to federal property, without regard to any mineral rights or any ornamental, decorative or non-functional features thereof, as the basis for computing the amount of any real property tax that would be applicable to that property if it were taxable property; (valeur effective)

  real property tax

  real property tax means a tax of general application to real property or immovables or any class of them that is

  • (a) levied by a taxing authority on owners of real property or immovables or, if the owner is exempt from the tax, on lessees or occupiers of real property or immovables, other than those lessees or occupiers exempt by law, and

  • (b) computed by applying a rate to all or part of the assessed value of taxable property; (impôt foncier)

  taxation year

  taxation year means the fiscal year of a taxing authority; (année d’imposition)

  taxable property

  taxable property means real property and immovables in respect of which a person may be required by a taxing authority to pay a real property tax or a frontage or area tax; (propriété imposable)

  taxing authority

  taxing authority means

  • (a) any municipality, province, municipal or provincial board, commission, corporation or other authority that levies and collects a real property tax or a frontage or area tax pursuant to an Act of the legislature of a province,

  • (b) any council of a band within the meaning of the Indian Act that levies and collects a real property tax or a frontage or area tax pursuant to an Act of Parliament,

  • (c) the band, as defined in subsection 2(1) of the Naskapi and the Cree-Naskapi Commission Act, if it levies and collects a tax on interests in Category IA-N land as defined in that subsection,

  • (c.1) any Cree First Nation, as defined in subsection 2(2) of the Cree Nation of Eeyou Istchee Governance Agreement Act that levies and collects a tax on interests in Category IA land, as defined in that subsection,

  • (d) the Council as defined in subsection 2(1) of the shíshálh Nation Self-Government Act, if it levies and collects a real property tax or a frontage or area tax in respect of shíshálh lands, as defined in that subsection,

  • (e) a first nation named in Schedule II to the Yukon First Nations Self-Government Act, if it levies and collects a real property tax or a frontage or area tax in respect of settlement land, as defined in that Act, or in respect of lands in which an interest is transferred or recognized under section 21 of that Act,

  • (f) the Nisga’a Nation or a Nisga’a Village, as defined in the Nisga’a Final Agreement given effect by the Nisga’a Final Agreement Act, if it levies and collects a real property tax or a frontage or area tax in respect of Nisga’a Lands, as defined in that Agreement,

  • (g) the Tlicho Government, as defined in section 2 of the Tlicho Land Claims and Self-Government Act, if it levies and collects a real property tax or a frontage or area tax in respect of Tlicho lands, as defined in section 2 of the Mackenzie Valley Resource Management Act,

  • (g.1) the Déline Got’ine Government, as defined in section 2 of the Déline Final Self-Government Agreement Act, if it levies and collects a real property tax or a frontage or area tax in respect of Déline Lands, as defined in 22.1.1 of the Déline Final Self-Government Agreement that is approved, given effect and declared valid by that Act,

  • (h) the Nunatsiavut Government, as defined in section 2 of the Labrador Inuit Land Claims Agreement Act, or an Inuit Community Government, as defined in section 1.1.1 of the Labrador Inuit Land Claims Agreement approved by that Act, if it levies and collects a real property tax or a frontage or area tax in respect of Labrador Inuit Lands or Community Lands, as defined in section 1.1.1 of that Agreement, as the case may be,

  • (h.1) the Tla’amin Government, as defined in subsection 2(2) of the Tla’amin Final Agreement Act, if it levies and collects a real property tax or a frontage or area tax in respect of Tla’amin Lands, as defined in that subsection,

  • (i) the Tsawwassen Government, as defined in subsection 2(2) of the Tsawwassen First Nation Final Agreement Act, if it levies and collects a real property tax or a frontage or area tax in respect of Tsawwassen Lands, as defined in that subsection,

  • (j) a Maanulth Government, within the meaning of subsection 2(2) of the Maanulth First Nations Final Agreement Act, if it levies and collects a real property tax or a frontage or area tax in respect of Maanulth Lands, within the meaning of that subsection, or

  • (k) the Whitecap Dakota Government, as defined in section 2 of the Self-Government Treaty Recognizing the Whitecap Dakota Nation / Wapaha Ska Dakota Oyate Act, if it levies and collects a real property tax or a frontage or area tax in respect of Whitecap Dakota reserve lands, as defined in section 2 of that Act. (autorité taxatrice)

• Marginal note:Deemed authority for purposes of the definition taxing authority

  (2) For the purposes of the definition taxing authority in subsection (1), where one authority collects a real property tax or a frontage or area tax that is levied by another authority, the authority that collects the tax shall be deemed to be the authority that levies and collects the tax.

• Marginal note:Property not included in the definition federal property

  (3) For the purposes of the definition federal property in subsection (1), federal property does not include

  • (a) any structure or work, unless it is

    • (i) a building designed primarily for the shelter of people, living things, fixtures, personal property or movable property,

    • (ii) an outdoor swimming pool,

    • (iii) a golf course improvement,

    • (iv) a driveway for a single-family dwelling,

    • (v) paving or other improvements associated with employee parking, or

    • (vi) an outdoor theatre;

  • (b) any structure, work, machinery or equipment that is included in Schedule II;

  • (c) any real property or immovable developed and used as a park and situated within an area defined as urban by Statistics Canada, as of the most recent census of the population of Canada taken by Statistics Canada, other than national parks of Canada, national marine parks of Canada, national park reserves of Canada, national marine park reserves of Canada, national historic sites of Canada, national battlefields or heritage canals;

  • (d) any Indian reserve, or any land referred to in any of paragraphs (c) to (e) of the definition taxing authority in subsection 2(1), except for the part

    • (i) that is occupied for residential purposes by an employee of Her Majesty in right of Canada who would not, but for that employment, live on that reserve or land, or

    • (ii) that is occupied by a minister of the Crown;

  • (e) any real property or immovable for which an original Crown grant has not issued, except to the extent that it

    • (i) is designated for a specific use by or under an Act of Parliament, or

    • (ii) is used by an Indian within the meaning of the Indian Act or an Inuk and is prescribed under paragraph 9(1)(e);

  • (f) any real property for which an original Crown grant has not issued, except to the extent that it

    • (i) is reserved in the records of the Department of Indigenous Services at Whitehorse or Yellowknife for the use of a department or an agency of the Government of Canada, and is either situated within a municipality or, in the case of real property that is not situated within a municipality, used in accordance with the reservation, or

    • (ii) is situated within a municipality and is reserved in the records of the Department of Indigenous Services at Whitehorse or Yellowknife for the use of an Indian within the meaning of the Indian Act or an Inuk;

  • (g) any real property or immovable developed or used as a public highway that, in the opinion of the Minister, does not provide, as its primary function, immediate access to real property or immovables owned by Her Majesty in right of Canada; or

  • (h) unless otherwise prescribed, any real property or immovable leased to or occupied by a person or body, whether incorporated or not, that is not a department.

• Marginal note:Effective rate — experimental farms

  (4) In determining the effective rate in respect of an experimental farm station, agricultural research station or other similar facility on federal property, the Minister shall take into account the rates of tax applicable to farms operated by agricultural enterprises.

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.

Marginal note:Regulations by Minister

10 The Minister may make regulations

• (a) establishing a form of application for a payment under this Act;

• (b) respecting the making of an interim payment in respect of a payment under this Act; and

• (c) respecting the recovery of any overpayments made to a taxing authority, including recovery by way of set-off against other payments under this Act to the taxing authority.

Payments by Crown Corporations

Marginal note:Regulations to be complied with in making grants

• 11 (1) Notwithstanding any other Act of Parliament or any regulations made thereunder,

  • (a) every corporation included in Schedule III or IV shall, if it is exempt from real property tax, comply with any regulations made under paragraph 9(1)(f) respecting any payment that it may make in lieu of a real property tax or a frontage or area tax; and

  • (b) every corporation included in Schedule IV shall, if it is exempt from business occupancy tax, comply with any regulations made under paragraph 9(1)(g) respecting any payment that it may make in lieu of a business occupancy tax.

• Definition of wholly owned

  (2) For the purposes of Schedules III and IV, a corporation is wholly owned if all the shares, membership interests or other evidences of interest in the corporation to which are attached votes that may be cast to elect directors of the corporation are held, directly or indirectly, other than by way of security, by, on behalf of, or for the benefit of one of the corporations included in those Schedules.

Advisory Panel

Marginal note:Appointment of members

• 11.1 (1) The Governor in Council shall appoint an advisory panel of at least two members from each province and territory with relevant knowledge or experience to hold office during good behaviour for a term not exceeding three years, which term may be renewed for one or more further terms. The Governor in Council shall name one of the members as Chairperson.

• Marginal note:Removal

  (1.1) A member appointed under subsection (1) may be removed for cause by the Governor in Council.

• Marginal note:Mandate

  (2) The advisory panel shall give advice to the Minister in the event that a taxing authority disagrees with the property value, property dimension or effective rate applicable to any federal property, or claims that a payment should be supplemented under subsection 3(1.1).

• Marginal note:Duties of Chairperson

  (3) The Chairperson shall supervise and direct the operation and functioning of the advisory panel.

• Marginal note:Establishment of divisions

  (4) The Chairperson may establish divisions of the advisory panel, and all or any of the powers, duties and functions of the panel may be exercised or performed by all or any of those divisions.

• Marginal note:Payments to members

  (5) Each member of the advisory panel is entitled to be paid, unless the member is employed in the federal public administration,

  • (a) remuneration in an amount fixed by the Governor in Council for each day or part of a day that the member is performing duties under this Act; and

  • (b) reasonable travel and other expenses incurred in the course of their duties under this Act while absent from their ordinary place of residence.

General

Marginal note:Agreements respecting leased properties

12 The Minister may enter into an agreement with the government of a province respecting the making of payments under this Act on any real property or immovable situated in the province that is prescribed under paragraph 9(1)(e) to be federal property.

Marginal note:Community pasture payment

13 Notwithstanding anything in this Act, federal property that, under an agreement with a province, is used as a community pasture may be excluded from the calculation of a payment in lieu of a real property tax if, with respect to that property, an alternative means of making a payment to a taxing authority in lieu of a real property tax is in effect.

Marginal note:Newly acquired property

14 Notwithstanding anything in this Act, when Her Majesty in right of Canada acquires taxable property, no payment shall be made under this Act in respect of that property for any part of the taxation year during which it was acquired.

Marginal note:No right conferred

15 No right to a payment is conferred by this Act.

Marginal note:Phase-in of payments in lieu

16 Notwithstanding anything in this Act or any regulation made under this Act, a payment in lieu of a real property tax that may be made under this Act in respect of any real property or immovable managed or held by a port authority mentioned in subsection 10(1) or 12(2) of the Canada Marine Act shall not exceed the following:

• (a) for a taxation year beginning in 1999, 25 per cent of the payment that may, but for this section, be made under this Act;

• (b) for a taxation year beginning in 2000, 50 per cent of the payment that may, but for this section, be made under this Act; and

• (c) for a taxation year beginning in 2001, 75 per cent of the payment that may, but for this section, be made under this Act.