NEWS RELEASE
May 12, 2021
For immediate release

Cold Lake, AB – A federal court judge has ruled that the federal government, through the Minister of Public Services and Procurement Canada and the Department of Public Services and Procurement Canada (PSPC), did not afford the City of Cold Lake procedural fairness, nor did it make reasonable decisions when it withheld payments in lieu of taxes (PILT) relating to CFB Cold Lake’s golfing facilities for 2019 and 2020.

This is the latest development in a series of ongoing legal actions initiated by the City of Cold Lake against the Government of Canada over PILT. The purpose of PILT is to ensure federal properties, which are exempt from taxation under the Constitution, pay a fair and equitable payment in lieu of taxes to compensate municipalities for the services provided to federal properties within their jurisdiction. PILT payments are generally comparable to what would have otherwise been paid in taxes.

This legal action arose when PSPC decided that the Cold Lake Golf and Winter Club, a Department of National Defence asset located on CFB Cold Lake, was not eligible for PILT because the City was running the facility for 4 Wing Cold Lake under a service agreement. The service agreement stated that PILT would continue to be paid. The court’s decision found that PSPC did not exercise procedural fairness in its decision making and that its final decision not to pay PILT for the golf club was unreasonable. The judgement returns the decision back to PSPC to redetermine the matter with the court’s ruling in mind.

“We are happy with the outcome of this latest legal action,” Mayor Craig Copeland said. “We have consistently maintained that the residents of Cold Lake are not getting a fair shake from the federal government on the PILT file. This decision moves us one step closer to a final resolution that we hope will culminate in a fair deal for the residents of Cold Lake.”

Since 2012, the City of Cold Lake and the federal government have been in a dispute over the valuation of CFB Cold Lake and the PILT owed by the federal government to the City of Cold Lake. To date, approximately $13.1 million in PILT is disputed, in addition to about $13.4 million in penalties, for a total outstanding bill of roughly $26.5 million.

In April of 2014, the City of Cold Lake won a decision at the PILT Dispute Advisory Panel, however, the Government of Canada applied that decision to only one of the disputed years. The City of Cold Lake is currently seeking a judgement for the remainder of the disputed tax years (2013-2020), and hopes for a result that will set the standard for PILT payments going forward.

“This dispute has dragged on for years and the only positive progress has been through legal action or appeals to the Dispute Advisory Panel,” Copeland said. “When all is said and done, there is only one taxpayer and Canadian taxpayers are footing the bill for the federal government’s fight against the City, whose residents, we feel, are being shorted. The situation is far from ideal, but our council has always taken a principled approach and refused to back down when we feel our residents are not being treated fairly, and we certainly feel that is the case here.”

The City of Cold Lake anticipates that the next step in the legal process will be to return to the Dispute Advisory Panel, for hearings to resolve all existing disputed tax years, and to prevent disputes in future tax years. The Dispute Advisory Panel hearing will likely be scheduled for late 2021 or early 2022.

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