Item - 2025.GG24.2

The General Government Committee recommends that:

1. City Council request the Chief Financial Officer to work with the Association of Municipalities of Ontario to advocate for:

a. Legislative amendments to federal and provincial Payments in Lieu of Tax frameworks to ensure transparency, consistency, and enforceability of payments; and,

b. Policy reforms that align Payments in Lieu of Tax calculations with municipal assessment practices and tax rates.

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 receivables from all levels of government that remain outstanding as at July 31, 2025, for the taxation year ending December 31, 2024. 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 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 payments in lieu of taxes receivables that the Deputy Treasurer has determined are unlikely to be paid. In these cases, the Deputy Treasurer (in consultation with the City Solicitor) is delegated authority under the City of Toronto Municipal Code Chapter 71 (Financial Control) to adjust for accounting purposes any outstanding receivables in respect of payments in lieu of taxes.

Through this delegated authority, the Deputy Treasurer, in consultation with the City Solicitor, has authorized adjustments to federal payments in lieu of taxes receivable accounts totaling $1,188,452 in July 2025 to reflect that these amounts are unlikely to be paid. 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 2025 Non-Program Operating Budget.