STEPHENSON: Kudos to HRM in legal victory over Citadel taxes
Every now and then, the little guys win.
Municipalities won big against the federal government last week as the Supreme Court of Canada ruled in Halifax’s favour in an 18-year dispute over tax payments on Citadel Hill.
When it comes to grants in lieu of taxes, which is how federal and provincial governments pay property taxes, municipalities have limited power to fight back against low ratings pinned to publicly owned properties.
There is a certain amount of negotiating back and forth, but when disagreements arise, municipalities have to pretty much take what they can get from the higher levels of government.
That’s why municipalities — especially those with significant federal properties within their boundaries — were watching the Halifax case closely in recent months. On Friday, municipalities across the country were busily trying to get a sense of whether the decision could help them in drawing higher levels of tax grants from Ottawa.
When it came to the Halifax Citadel, the federal government simply pushed its power too far. Its position that the grassy slopes of land surrounding the fortress were worth a mere $10, because they could not be developed, obviously defied common sense.
The Citadel is the most frequently visited historic site in the country, so the city obviously draws a benefit from having the fortress overlooking the downtown and harbour. But the city is responsible to provide services to the site and the tax transfer, in which Ottawa has had the final say, needed to be fair.
“The minister cannot base his valuation on a ‘fictitious tax system’ that he himself has created, but that is exactly what happened in this case,” Justice Thomas Cromwell wrote on behalf of the court.
The ruling will mean roughly an extra $500,000 in tax grant funding to Halifax in future years. The city is also claiming $8 million in back payments dating through the years of the dispute, but it could have some difficulty forcing Ottawa to pay up.
The Supreme Court ruling was unanimous and awarded legal costs to the city. It took five years for the case to make its way through the court system.
Ottawa must now come up with a property value based on assessed value for the land, which will be challenging due to the restrictions on the property. The city has pegged the value of the additional property at $19 million. Halifax has placed a $39-million value on the entire site, while Ottawa’s position had been that it is worth only $2.5 million.
That didn’t wash with the court, which said the value must meet the standard of fairness required by the federal act under which grants in lieu are paid to municipalities.
“It can hardly be though either fair or equitable to conclude that 42 acres in the middle of a major metropolitan centre has no value for assessment purposes,” the court found.
The ramifications will likely be felt in Quebec City, where Ottawa pays a grant for the huge Plains of Abraham site, and in provinces right across the country. In Alberta, tax grants for 59 national historic sites could be impacted by the Halifax Citadel decision.
It could well be argued that the decision will simply lead to money being moved around among levels of government, all of which is collected from the same taxpayers. But it is the individual municipalities that have been sharing these service burdens — unfairly, as the court found in Halifax’s case — with little recourse.
Kudos to the city for sticking to its guns during a long and arduous battle against an unrelenting, patriarchal upper government.
The federal position could have been stronger if a more reasonable approach had been applied in past years. By arrogantly setting the value at $10, Ottawa was obviously asking for trouble.
As in other areas
Submitted by Selina on June 19, 2012 - 7:38am.
The "Harper Government" will probably just refuse to pay. Although Clement could just take money from the trunk of his car to meet the bill, the government will stand on "principle".
The principle, of course, is being told to follow the law and do something that is against their autocratic ethos.
What's in your yoghurt, Selina?
Submitted by shawnino on June 19, 2012 - 9:02am.
I guess it's the culture of defeat.
Nothing to do with Harper
Submitted by roy rogers on June 19, 2012 - 1:05pm.
An 18 year fight - started in 1994 after the Chretien Liberals too power in Ottawa and started downloading on provinces and municipalities.
True Roy...
Submitted by shawnino on June 19, 2012 - 3:15pm.
...but that's the culture of defeat. Even when we win a court case, we look for a way to say we've lost. I don't know whether to laugh or cry.
Stare at overgrown fields and alders instead
Submitted by pitstop on June 19, 2012 - 7:51am.
Ottawa's upkeep responsibility begins at the drawbridge entrance. Parks Canada should just mow the moot and let the rest grow and stop plowing the roads in winter (lock the front gate like other parks). Nothing like a true reenactment, that's how it was in 1850.
You want free money, then Dexter should have to send in Parks Nova Scotia to do the upkeep if this park suddenly doesn't meet his standard. Personally would like to see the hill overgrown. It would actually be a fitting daily reminder to Halifax residents and its ignorant governments what many rural Nova Scotian communitees look like with their present "take but give nothing back" attitude.
Wheaties
Submitted by Tank on June 19, 2012 - 8:44am.
Boy, someone didn't eat his Wheaties this morning. Attitudes like yours are what keeps me volunteering for heritage organizations. Citadel hill was started around 1750, never fired a cannon ball in anger, so I don’t understand why 1850 is a date of interest to you. It is a moat (not moot) and Nova Scotia does not have a “Parks” department. As for “ignorant” governments who “take but give nothing back” comment, we could find a little common ground there. However, as I drive on government roads, enjoy police and fire protection for my property and make use of many government facilities, our agreement would only be to pacify you as the boys with white coats sneak up on you. SURPRISE!!!!!!!!.
Now the parks will have to layoff staff
Submitted by Halifaxguy on June 19, 2012 - 9:37am.
...so they can pay more taxes to the Sheriff of Nottingham and his court of spendaholics. Maybe HRM, and its Parks staff should take over maintenance at Citadel Hill. They'd probably have to give up their afternoon nap.
Taxing Stupidity
Submitted by CapeHalifax on June 19, 2012 - 10:18am.
How does adding Seven Million Dollars to the overhead of the operations of the Citadel advance the cause of all those private individuals who laboured long and hard for decades as "Friends of the Citadel" to get the long neglected bastion of federal ignorance up to some sort of condition that it could be anything but an eye sore and blight on the Halifax landscape?
Where were the Lord Mayors when a little investment would have went a long way to enhancing the fortunes of this business incubator in the downtown - after all Tourism is Industry.
It wouldn't surprise me if the Harper Government invented some way to doubly tax the edifice. Wanna hold a concert? Dig deep. Expect fences and gates to reappear on the site with admission prices for sunbathing.
For a place that never fired a shot in its entire existence, there is a surprising amount of skirmishing going on it those green fields for little reason.
Moot point, Tank
Submitted by pitstop on June 19, 2012 - 10:31am.
Yes, I was tanked off this morning, my doctor hasn't let me put suger on my wheaties for 5 weeks now and my thinly disguised sarcasm shows. I've spent 3 weekends this spring doing volunteer weekend work not just here in Halifax but also elsewhere in our beautiful province. Reading about this "victory" just reinforced my resolve when it comes to exposing the NDP government's present unfair policy of going after propertys that aren't paying their "fair" taxes. Did you realize that most properties between job ravaged,, economically hard hit Liverpool to Yarmouth had their property tax increased last year and will almost certainly again next spring with the rest of Nova Scotia. That's as fair as making Ottawa payout extra for a free attraction like the Citedel that directly benefits this city and the province. Seems like it's presently good to be a lawyer in Nova Scotia if part of Dexter's pro-union "brotherhood" and in "good standing". He's stacked them like cordwood in our property taxation, UARB and labour dispute systems. Nova Scotia, unfortunatily, is NOT benefiting from point-of-law and legal interpretations as presently practised by these Dexter "less then independent" tribunals.
Thankfully, there is still lawyers in Nova Scotia with integrity that refuse to join his "brotherhood"!
Kudos
Submitted by Tank on June 19, 2012 - 11:50am.
Your doctor needs to set you up with happy pills or a prescription for Mary Jane, works for me (mostly joking). Personally, I don't get too mad at government, they are all pretty much the same regardless of the party du jour. I can't spend much time upset at something I cannot change. This IS a beautiful province and now that I understand you are a volunteer, my hat is off to you, kudos. I agree, we are under attack, economically speaking, but there are larger forces at play than our provincial NDP government. Have a fantsatic day my friend, and keep on volunteering. Without people like us, there would be much less for us all to enjoy.
It makes no sense for one level of government to tax another.
Submitted by city mouse on June 19, 2012 - 10:58am.
It all comes from the same place.
Couldn't agree more
Submitted by Quiet Comment on June 20, 2012 - 5:08am.
The whole "Victory" feeling is a ruse. Who gets to pay? The same people who pay now. Makes no sense.
Worthless?
Submitted by nexx on June 19, 2012 - 10:54am.
Ask any developer if the land surrounding the fort is worthless. It's nice to have a Parks Canada attraction in our city, but you still have to weigh the opportunity cost. Oh, and Parks Canada charges a fee to use that "worthless" grassy hill for concerts and other events.
Likely a mute point.
Submitted by Bewaretheright on June 19, 2012 - 11:46am.
Wow, the trogs that live in the basement of the Manning Centre are out in full force. Harper's Reform party will never pay a nickel of this judgement. Downtown Calgary , yes , Downtown Halifax, never ! This is a reasonable decision that has been too long in coming. Look out for the privatization of these historic sites, coming soon from the Harper government.
"Look out for the
Submitted by CoyoteII on June 19, 2012 - 1:31pm.
"Look out for the privatization of these historic sites, coming soon from the Harper government."
Yes, chicken little, the sky is falling!
Hmm...ideas
Submitted by BSacamano on June 19, 2012 - 12:49pm.
Since federal property is exempt from municipal planning laws, I think they could easily make up the difference with a little creativity. A couple cell phone towers, maybe? A wind turbine or two? A "historical re-enactment" on the Trollope Street side--provided the SCC upholds the prostitution ruling, that is.
Bewaretheright
Submitted by smullan on June 19, 2012 - 2:08pm.
Did you say a moot point, mute point or a moat point.
Why does everyone in Nova Scotia blame the Harper government for all of Atlantic Canada's woes.
This dispute predates the Conservatives being the federal government.
Are any of these same people blaming Comrade Dexter for the closing of the Bowater mill or holding him to task for the $25 million he gave to the parent company to spend in Quebec. No, that's probably Harper's fault too.
Just like the green tax that is driving power rates through the roof and everyone in Nova Scotia out of business. It certainly will stay green here that's for sure.
Oh wait now. What about the open pit mine that the province wants to see opened in the Moose River area. How does that fit into the green strategy. Where's Darrell Dexter and Megan Leslie on this one. I know, Harper strikes again. Special privleges for big business and blah blah blah..right