City loses taxes on University property

Queen’s fees in lieu of taxes a point of friction with city, Vice-Principal (Operations) says

Mayor Harvey Rosen says the city is looking for the provincial government to conduct a review of the head tax applied to colleges and universities across Ontario.
Mayor Harvey Rosen says the city is looking for the provincial government to conduct a review of the head tax applied to colleges and universities across Ontario.
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The City of Kingston contributed $1 million to the University Avenue Restoration Project to help with the repair and replacement of infrastructure such as gas and water mains.
The City of Kingston contributed $1 million to the University Avenue Restoration Project to help with the repair and replacement of infrastructure such as gas and water mains.
Photo: 

Despite inflation, the University’s property tax hasn’t gone up since 1987. The price per student was $50 in 1973 and rose to $75 in 1987.

In total, the provincial government pays about $1.5 million per year to the city of Kingston on the University’s behalf.

According to City Commissioner Gerard Hunt, if the University were required to pay taxes on all of its properties based on a market property value, amount paid to the city would rise to somewhere between $6 million and $6.5 million.

The federal government is exempt from paying taxes to local and provincial governments on property it owns. According to the Public Works and Government Services Canada website, federal facilities include office buildings, military bases, correctional institutions, national parks and harbours.

The Government of Canada has been making payments in lieu of taxes since 1950, under the Municipal Grants Act, updated in 1980.

In 2000, the federal government created a program called Payment in Lieu of Taxes (PILT), through which it distributes more than $460 million a year to local and provincial governments instead of paying property taxes.

The PILT Act tax exemption applies to all educational buildings. Queen’s pays regular property tax on all non-educational properties such as residences and buildings such as the JDUC that are used primarily for retail services.

Vice-Principal (Operations and Finance) Andrew Simpson said the amount paid in lieu of the University’s property taxes is a point of friction between the University and the city.

“That’s part of the issue that comes up at council often,” Simpson said. “They think the amount in lieu of taxes is insufficient to cover their costs.”

Mayor Harvey Rosen said he has been concerned about the amount of the payment in lieu of taxes for years.

“It’s been 20 years since any increase. Even if we’d taken it at the base of $50 in 1973 and applied inflation to it, it would be well over $250 per student.”

Rosen said the city’s looking for the provincial government to conduct a review of the head tax applied to colleges and universities across Ontario.

The money is necessary, he said, if municipal services are going to continue to be provided at the highest level.

Because the money is paid by the Ministry of Training, Colleges and University, students won’t be responsible for the increase unless the province decided to ask institutions to contribute.

Sydenham Ward councillor Bill Glover said he’s also concerned with the size of the payment, especially in light of the rate at which Queen’s is expanding.

For every house demolished to make space for the Queen’s Centre, the city loses an average of $2,500 annually in property tax.

The city will lose between $150,000 and $200,000 in revenue this year because the University bought the Prison for Women earlier this year.

Cpt. Dan Madryga, Canadian Forces Base Kingston’s public affairs officer, said the federal government pays almost $8 million a year for the base under the PILT Act, which includes more than 200 buildings. Madryga said the amount is determined by a property value assessment, conducted every few years—not by a head count.

“It’s an ongoing assessment” he said. “Every year or two they do an assessment. … If there’s constructing at the garrison or whatever, obviously they have to take that into account.” The last assessment was completed in 2005.

—With files from Gloria Er-Chua

Taxes, taxes

$50

Price paid per Queen’s student in lieu of property taxes in 1973

$75

Price paid per Queen’s student in lieu of property taxes in1987

$75

Price paid per Queen’s student in lieu of property taxes in 2006

$250

Amount that would be paid per Queen’s student if 1973 price were indexed to inflation

$1.5 million

Total amount Ontario government pays on Queen’s behalf in lieu of property taxes

$6 million to $6.5 million

Approximate amount Ontario government would pay on Queen’s behalf if it paid full property taxes on all Queen’s buildings

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