Dispute over Citadel Hill taxes resolved, feds pay Halifax $20 million

A decades-long dispute between the city of Halifax and the federal government over the value of Citadel Hill is finally over.

A statement from the Halifax Regional Municipality says the federal government has agreed to a payment of $20 million in lieu of taxes for the taxation years 1997 to 2015.

“On behalf of Regional Council, I’m delighted that we have addressed this outstanding issue,” said Halifax Mayor Mike Savage.

“This is the culmination of a significant effort over the past few years with our counterparts at the federal government, and our municipal staff worked hard to achieve a positive resolution. The municipality will now have the opportunity to invest that money toward the betterment of the region as a whole.”

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In 2012, the Supreme Court sided with Halifax in the dispute. Halifax had valued the land at $42 million. Ottawa argued the land had no commercial value and was worth only $10, but the court rejected that argument.

In 2014, the two sides went before a federal panel in Halifax to determine how much Ottawa owed the city in back taxes. A year later, the panel valued Citadel Hill at $41.2 million.

The panel’s recommendation was sent to the Public Works Department. Public Services Minister Judy Foote was to make the final decision.

“We are pleased to have reached an agreement with the Halifax Regional Municipality regarding payment in lieu of property tax for the Halifax Citadel. Our Government is committed to ensuring that municipalities receive fair and reasonable payments in lieu of taxes for federal properties in their jurisdiction,” Foote said in a statement released by the department of Public Services and Procurement Canada.

The back payment will be added to the amount the federal government has already paid.

“Over the 19-year period under dispute (1997-2015), we received nearly $4 million in Payments in Lieu of Taxes (PILT) payments from the federal government for Citadel Hill. This brings the total PILT amount to $24 million for the 19-year period, including the recently received $20 million payment,” said Tiffany Chase, a senior communication adviser with the city.

The money will sit in a reserve while municipal legal fees are calculated and deducted.

“With respect to the Supreme Court of Canada case, approximately $200,000 in external legal costs, which were recovered as part of the Supreme Court decision. $76,900 was incurred in external legal costs for the Dispute Advisory Panel hearings and $40,000 was used for external appraisal service fees,” Chase said.

With files from Alexa MacLean