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PortsToronto’s Massive Arrears of Island Airport Property Taxes Still Unpaid Province Has Ignored PoTo’s Request for Subsidy
For Immediate Release Thursday, October 15, 2015
Contact: Brian Iler, Chair 416-835-4384
In a release quietly issued on October 13, 2015 PortsToronto
“confirmed that it has accepted the City of Toronto’s proposal with regard to Payments in Lieu of Taxes (PILTs) and has paid in full all PILTs associated with the organization and its properties. The settlement addresses all PILTs matters dating back to 1999.”
That release admits that any resolution of the $50M+ property tax arrears for the Island Airport requires “implementing provincial legislation”.
And the Provincial Government has refused to get embroiled in the ongoing Island Airport controversy.
Both PoTO and the City passed the buck to the Province, in a secret decision made at the October 2013 Council meeting.
After that became public, CommunityAIR wrote to Ontario Finance Minister Charles Sousa on July 23, 2014, outlining why he should refuse PoTo’s hoped-for resolution. Minister Sousa has not responded, notwithstanding efforts by CommunityAIR to obtain a response through local MP Han Dong.
“Ports Toronto’s proposed resolution, essentially, subsidizes its favoured airline, Porter, by in excess of $2 ½ million per year, and deprives the City of Toronto of that desperately-needed revenue. No other City taxpayer gets such a sweet deal. No wonder Finance Minister Sousa has ignored PoTo’s request. But it’s time for Minister Sousa to do right by Toronto, and, finally, say no to PoTO/Porter.” said Brian Iler, Chair of CommunityAIR.
CommunityAIR’s letter to Finance Minister Sousa is attached.
(CAIR logo) dated July 23, 2014
“[The Island Airport’s proposed per-passenger fee] … is not sustainable as a matter of jurisdiction nor as a matter of reasonableness.” Federal Court of Canada in City of Toronto v. Toronto Port Authority
We write to you as the Minister responsible for the Assessment Act.
The Toronto Port Authority has requested your Government to amend the Assessment Act Regulations to permit it to pay 94¢ per departing passenger in lieu of the normal regime of property taxes on its Island Airport lands based upon the municipal mill rate applied to the MPAC assessed value.
We urge you not to allow the Port Authority to avoid its responsibilities to the citizens, and taxpayers, of the City of Toronto.
Instead, we request that you join the Federation of Canadian Municipalities’ campaign to insist that the Federal Government and its agencies pay their fair share of taxes to Canadian municipalities.
The Toronto Port Authority has resisted paying its fair share of property taxes for the Island Airport to the City of Toronto for many years now.
The arrears, based upon that normal regime, exceed $50,000,000ii. The Port Authority’s failure to pay amounts to a massive subsidy of the Island Airport operations by the taxpayers of the City of Toronto.
While the City of Toronto has vigorously pursued these arrears, with several favourable judgments in the Courtsiii, Toronto City Council recently and inexplicably capitulated, agreeing to place this issue in your Government’s hands for resolution.
The Port Authority avoids its responsibilities in order to provide its prime tenant, Porter Airlines, with the lowest possible costsiv.
The Island Airport lands, situated in downtown Toronto, are exceedingly valuable, with MPAC assessment for 2012 of $144,423,000.
At the Toronto commercial tax rate of about three percent, property taxes payable on the Island Airport lands should have been $4,332,690 for 2012.
The proposed per-passenger payment would amount to about $1,786,000, based on 2012 Island Airport passenger levels.
That’s $2,546,690 less than any other City taxpayer would have to pay for those 215 acres in that year.
That revenue could go down if Porter’s passenger sales continue to decreasev.
With increasing property values, if the province agrees, the taxpayers of Toronto would be forced to provide a subsidy to Porter in excess of $2.5 million per year, indefinitely.
Until recently, the TPA refused to pay anythingvi.
While Pearson Airport has that deal, Pearson is located on land that is much less valuable, is not the virtually-exclusive domain of one private business.
There are strong land use planning policy reasons why Pearson got that deal, and Porter should not.
Pearson is the Greater Toronto Area’s air transport hub, and squarely within the principles set out in your Government’s 2005 Provincial Policy Statement.
As noted by the City’s consultant in its examination of Porter’s Jets proposalvii, that Statement concludes that
“the Island Airport is contrary to Provincial policy preferences for airports because of its proximity to homes and other sensitive uses and the absence of available land for expansion and complementary employment uses.
“That Statement identifies an incompatible land use relationship between airport operations and residential development and other sensitive uses. It acknowledges that airport operations create noise, contaminants and odors that affect residential and sensitive uses, and that this land use mis-match can threaten the long- term operation of airports or cause aviation hazards.
“The location of the Island Airport also prevents it from supporting the development of complementary employment land uses in its vicinity and from realizing the full potential for goods movement normally associated with international airports. [Your Government’s] 2006 Growth Plan for the Greater Golden Horseshoe envisions airports as being surrounded primarily by relatively heavy employment uses.
“The Plan encourages municipalities to reserve lands around airports for manufacturing, warehousing, and associated retail, office and ancillary facilities, and for other land uses that support the use of long-haul airports as goods movement facilities.
“This will not be possible for the Island Airport given its urban and waterfront park surroundings.”
Please confirm that your Government will not accede to the Port Authority’s (and Porter’s) wishes in this matter, and will support payment of taxes by federal agencies on the same basis as every other municipal taxpayer, as contemplated by the regulation under the Payments in Lieu of Taxes Act.
We look forward to hearing from you.
Signed, Brian Iler, Chair
References available upon request