AAPA Seaports Advisory

Intergovernmental Relations: Prince Rupert

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Prince Rupert Port Land Payment Agreement with City Sets Course for Further Collaboration and Investment

The City of Prince Rupert and the Port of Prince Rupert have agreed on the value of Payments In Lieu of Taxes (PILT) the ports owed the city for 2013, 2014 and 2015. The valuation of vacant port lands had been under review since 2013.

While unleased federal crown lands are specifically exempt from local taxation, they are subject to the federal PILT Act, which applies to federal agencies like the Prince Rupert Port Authority. The act ensures that annual payments are made to municipalities and other taxation authorities based on local property tax rates and requires the agencies to provide independent valuations of their lands.

The City of Prince Rupert disputed the valuations provided of several vacant port properties. The city and the port authority worked together to identify how and why valuations differed and came to a negotiated settlement amenable to both.

The settlement results in total payment from 2013 to 2015 of C$5.3 million to the City of Prince Rupert acting on its own behalf and as agent for other taxation authorities.

The city and port devised a process emphasizing greater communication and less uncertainty to guide the calculation of PILT payments for 2016 and beyond. This process involves the port working with the city and a provincial government agency, BC Assessment, to manage the risk of potential differences in property valuations.

"The port and city are working to develop a more collaborative relationship, recognizing that we share the best interests of the community. Faced with differing opinions on land values, both the port and city staff have acted respectfully and professionally throughout this process. This outcome will allow better certainty for city budgeting, and more opportunities for collaboration with the port to prepare for growth," said Mayor Lee Brain.

"This represents a satisfactory conclusion of a long conversation about the value of vacant federal lands administered by the port," said Port Authority President Don Krusel. "We look forward to strengthening our relationship with the city as we both seek to improve the vitality of our community."

The agreement included a commitment by the city and the port to invest in a future local infrastructure project of mutual interest — and to explore a coordinated response to provincial legislation that caps municipal taxation of port terminals.

"The Port Property Tax Cap is an important catalyst for investment in BC and, in particular, has been effective in stimulating development at the Port of Prince Rupert.," said Mr. Krusel. "We are supportive of reviewing the Act to explore whether the framework may be improved to provide more financial certainty to local municipalities."


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