Chelsea’s municipal Council adopted a resolution at the June 4th ordinary meeting mandating its attorneys to seek leave to appeal to the Supreme Court of Canada, following the Federal Court of Appeal’s ruling in the dispute with the National Capital Commission (NCC) over unpaid taxes.
“This is a matter of fairness for Chelsea taxpayers. Our citizens must not bear the brunt of this Federal Court of Appeal decision and the NCC’s unfair treatment. We have every intention of seeing this through to the very end, to safeguard the rights of the municipality and its citizens,” said the mayor of Chelsea, Pierre Guénard.
Council condemns the fact that the Municipality of Chelsea received fewer payments in lieu of taxes (PILT) from the NCC in 2023 than in 2010, despite a sharp increase in the assessment roll and several property acquisitions. The shortfall, estimated at nearly $270,000 in 2018, now stands at over $900,000 annually and will continue to grow over the years.
Given that Chelsea’s annual budget is approximately $26 million, this is a considerable sum, and it would be a huge burden for taxpayers. In concrete terms, it would amount to an annual property tax increase of $264 for the owner of a home of average value in Chelsea.
“And that’s not counting all the other responsibilities we have in conjunction with the two million visitors a year to Gatineau Park, mostly road maintenance, traffic management and parking. The impact on our citizens is immense. It’s time for the NCC to work with us fairly and respectfully and to treat us as partners” continued the mayor.
“This case goes beyond Chelsea, as it affects all municipalities with federal properties in their jurisdiction. With the challenges facing Quebec municipalities, the Federal Court’s ruling has far-reaching consequences and sets a damaging precedent for municipalities,” added Mayor Guénard.
The dispute began in 2018, when the NCC refused to recognize the appraisal of its land in Chelsea’s Gatineau Park, and therefore refused to pay based on the fair value established by independent appraisers engaged by the MRC des Collines-de-l’Outaouais.
Background:
- The dispute has been ongoing since 2018 and concerns the non-remittal of approximately $1.4 million in payments in lieu of taxes (PILT) for land owned by the NCC in Gatineau Park located within Chelsea.
- The NCC does not recognize the valuation of its land in Chelsea and therefore refuses to pay taxes on the basis of the fair value established by independent appraisers hired by the MRC des Collines-de-l’Outaouais. It is important to note that more than 60% of Chelsea’s territory consists of NCC-owned land.
- At the NCC’s suggestion, the Municipality turned to the Payments in Lieu of Taxes Dispute Advisory Panel (PILT-DAP), established by law to resolve PILT disputes.
- In 2019, the NCC had even committed in writing to abide by the PILT-DAP’s findings.
- The 5-day panel hearing was held in November 2020, and at the NCC’s request, the PILT-DAP was composed of three independent pan-Canadian experts.
- In February 2021, the PILT-DAP unanimously found in favour of the Municipality of Chelsea, in large part regarding the value of the land in dispute. It recommended that the NCC establish its PILT to the Municipality of Chelsea based on almost all the land evaluations supported by the experts hired by the MRC des Collines-de-l’Outaouais.
- For the 2021-2023 assessment roll, the value of the land in dispute established by the MRC was $144 million, while the NCC recognized a value of $64 million, or only 44% of that.
- In June 2021, the Municipality of Chelsea received a proposal from the NCC that did not reflect either the PILT-DAP’s conclusions or its principles.
- In that proposal, the NCC asked the Municipality to accept a lump-sum payment other than in PILT form for the taxation years 2018 to 2023 and to agree, for the future, to apply land valuation principles contrary to the principles and rules established by the PILT-DAP and without any commitment on the NCC’s part to compensate for the shortfall that would result from a payment other than in PILT form.
- If Chelsea were to accept the NCC proposal, it would lose the equivalent of approximately $800,000 annually starting in 2024 and for all subsequent years.
- The Municipality of Chelsea went to Federal Court in December 2021 to seek enforcement of its rights. The judgment was finally issued on January 23, 2023.
- In February 2023, the Municipality decided to appeal the Federal Court ruling.
- Following the Federal Court of Appeal’s decision of May 6, 2024, the Municipality of Chelsea has decided to appeal to the Supreme Court of Canada.
