Item - 2023.GG6.24

The General Government Committee recommends that:  

1. City Council delegate to the General Government Committee the authority to hold meetings at which applicants can make representations to the Committee and to make the final decision with respect to payment in lieu of tax applications under section 324 of the City of Toronto Act, 2006 (the "Act"), and amend Chapter 27, Council Procedures accordingly.

This report provides information on the status of payments in lieu of taxes (PILTs) 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 August 31, 2023 for the taxation year ending December 31, 2022. 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 deemed unlikely to be paid.

Through this delegated authority, the Controller has approved and made adjustments to federal, provincial, and municipal payments in lieu of taxes receivable accounts totaling $3,928,395 in August 2023 to reflect that these amounts are not likely to be collected. 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 2023 Operating Budget under the Payments-in-Lieu Provision account.

In 2017, section 324 was added to the City of Toronto Act, 2006 to allow City Council to cancel, reduce and refund payment in lieu of taxes (payments in lieu of taxes) under the same circumstances as permitted for taxable properties pursuant to section 323 (1). Council delegated authority to the Government Management Committee, now the General Government Committee to consider tax applications submitted under sections 323 and 325 of the City of Toronto Act, 2006. Staff are now seeking Council's approval to also delegate authority to the General Government Committee to consider applications for cancellation, reduction and refund of payments in lieu of taxes under section 324.