This is the text of a letter sent to Toronto Mayor John Tory by CommunityAIR.
Mayor John Tory, City of Toronto
Dear Mayor Tory
Re: PILTs and the Island Airport
We read with interest the report this week of the City of Mississauga’s efforts to obtain redress for a number of outstanding grievances with the Greater Toronto Airport Authority, which operates Pearson Airport.
The Star quoted Mississauga Councillor Carolyn Parrish as saying:
“It’s like the Vatican in the middle of Italy,” she said. “They are completely unto themselves and until this point when they wanted something they have been so unco-operative as to be embarrassing.”
A key issue is the amount the Authority pays to the City of Mississauga on account of property taxes.
What is striking is the strenuous efforts the City of Mississauga is making to collect its fair share of property taxes, when, by contrast, the City of Toronto ignores that issue in relation to the Island Airport.
By failing to collect its fair share of property taxes for the 215‑acre Island Airport lands, the City provides a massive subsidy to the Island Airport, which has provide Porter Airlines with a virtual monopoly.
Those 215 acres are some of the most valuable land in Toronto.
MPAC reports that, for 2016, the assessed value of the Island Airport lands was $172,870,000.
At the commercial tax rate of about 2.5 percent, property taxes payable on the Island Airport lands should have been $4,321,750 for 2012.
The City collected $3,249,000 in 2016 ‑ a shortfall of $1,072,750.
The amount paid was based upon a secret deal made by the City with the Toronto Port Authority (also known as Ports Toronto) in 2015.
The City of Toronto had battled the Toronto Port Authority for more than a decade to collect property taxes on the Island Airport and other lands owned by the Port Authority.
That battle, fought so hard by the City, ended when the City, faced with an intransigent and stubborn Port Authority, capitulated, agreeing to go together to the Province to seek authority for a payment of 94 cent per passenger, instead of one based on the value of the Airport lands.
The Province has never agreed to implement that deal. But both the City and the Port Authority treat it as if it had been.
The Province is aware that federal law prohibits the deal the City made – see this Regulationunder the Payments in Lieu of Taxes Act:
“a payment made by a corporation [i.e. the TPA] in lieu of a real property tax for a taxation year shall be not less than [our emphasis] the product of
(a) the corporation effective rate in the taxation year applicable to the corporation property in respect of which the payment may be made; and
(b) the corporation property value in the taxation year of that corporation property.”
This says clearly that the TPA must pay its taxes (known Payments in Lieu of Taxes or “PILTs”) on the same basis as every other taxpayer
That Regulation, in section 3(1), prohibits the Toronto Port Authority from entering into a special arrangement with a local government, province or other authority to pay an amount in lieu of such a tax that would be less than the amount that it would pay in accordance with these Regulations.
Our question: Mr. Mayor, will you put an end to this taxpayer subsidy of the Island Airport, by insisting that the Port Authority obey the law, and join the City of Mississauga in fighting for both cities’ fair share of property taxes from airports?
I look forward to your response.
Brian Iler, Chair of CommunityAIR