Item - 2022.GL32.31

The General Government and Licensing Committee recommend that:  

1. City Council receive the report (May 27, 2022) from the Controller for information.

This report provides information on the status of payments in lieu of taxes requested from federal, provincial and municipal properties, and identifies payments in lieu of taxes payments from all levels of government that remain outstanding as at December 31, 2021.  The status of outstanding payments in lieu of taxes is reported to Council annually in accordance with a recommendation from the Auditor General in 2015.

Payments in lieu of taxes are voluntary payments made to the City of Toronto by the federal, provincial and municipal governments and agencies to compensate the City for municipal services it delivers to their properties.  In most cases, government agencies pay the full amount of payments in lieu of taxes that the City requests.  There may, however, be outstanding payments in lieu of taxes amounts requested from federal, provincial or municipal bodies that the Controller has concluded, in consultation with the City Solicitor, to be uncollectible.  In these cases, the City of Toronto Municipal Code Chapter 71 (Financial Control) provides authority to the Controller, in consultation with the City Solicitor, to adjust for accounting purposes any outstanding receivables in respect of payments in lieu of taxes that have been determined unlikely to be paid.

Through this delegated authority, the Controller has approved and made adjustments to three federal payments in lieu of taxes receivable accounts totaling $13,485,624 in December 2021 to reflect that these amounts are not collectible.  As a result, the City's outstanding payments in lieu of taxes receivable balance has been reduced by $13.5 million, from a net payments in lieu of taxes receivable of $20.9 million at the end of 2020, to a net payments in lieu of taxes receivable of $7.1 million by the end of 2021, a reduction of 66 per cent. The amounts approved for adjustments will not have a negative financial impact for the City since these amounts have been included in the City's Non-Program 2021 Operating Budget under the Payments-in-Lieu Provision account.