City council to further subsidize Porter?

‘They pay no rent to the city on 25.9 hectares of airport land, nor for their Stadium Road parking lot, nor for the queuing lanes along Eireann Quay’

By Brian Iler –

The Toronto Port Authority is pressing hard to get its sweetheart deal for property taxes through city council at its meeting July 16. It delivered a letter to the City’s chief bureaucrat, Joseph Pennachetti, July 15.

The City already provides the Toronto Port Authority and Porter with a massive subsidy of its Toronto Island Airport Land: they pay no rent to the City on its 25.9 hectares of airport land, nor for its Stadium Road parking lot, nor for its queuing lanes along Eireann Quay.

The proposal before Council removes the Island airport lands from the usual manner in which property taxes (and PILTs) are calculated – the application of the City’s mill rate to the Municipal Property Assessment Corporation property valuation, and puts the TPA (and Porter Airlines) in the position of getting yet further subsidies of their operations from the City.

This is a dispute that has waged since the TPA was created in 1999. Since that date, the TPA has refused to pay its fair share of taxes, resulting in arrears owing in excess of $50M, we are advised.

The City successfully appealed a perverse decision of an internal federal entity – the Disputes Resolution Tribunal – and that Tribunal is to once again review the issue in the manner instructed by the courts.

We see no good reason why the City should back down from its position, endorsed by the Courts, that the appropriate amount of taxes payable under the PILTs regime is based upon MPAC determinations. This pressure from the TPA suggests it thinks there is advantage to it to get its way.

The benefit of any settlement flows directly to Porter:

The TPA has agreed with Porter that it must pay only the Airport’s operating costs, and that no charge may be made by the TPA for its use of the airport lands beyond those operating costs.

If an appropriate amount of PILTs is paid, Porter, and not the TPA, would be required to pay them, as an operating cost.

The issue of payment of PILTs by the TPA is inextricably bound up in the review of all of the operations of the Island airport currently underway, as a result of the proposal by Porter Airlines to introduce jets to the Airport.