The Société du Vieux-Port de Montréal suffered another setback – this time before the Federal Court of Appeal – in a tax dispute with the city that could cost it some twenty million. The question at the heart of the dispute: is the Old Port, where there is an IMAX cinema, the Terrasses Bonsecours and an array of commercial activities, a park?
About two years ago, the Federal Court said no. She agreed with the City of Montreal by cutting to pieces many of the arguments brandished by the manager of the Old Port in order to evade a tax mechanism. In a roughly 40-page decision rendered on June 5, Judge George Locke reached similar conclusions to those of the trial court.
“I would dismiss this appeal because I also find that the [society’s] decisions were unreasonable,” wrote the magistrate. I would therefore refer the matter back to the company for redetermination, just as the Federal Court ordered. »
This means that the Old Port of Montreal Corporation must negotiate with the municipality to find common ground on the amounts to be paid. This dispute dates back to 2014. In 2020, the shortfall was close to 23 million. It was not possible to get an idea of the outstanding amounts for the following years. To this could be added the payment of a “late fee” to the City – a suggestion of the trial court – since things drag on.
Crown corporations like the Old Port are exempt from property tax since they enjoy tax immunity. However, a mechanism – the Payments in Lieu of Taxes Act (LPRI) – obliges them to pay sums to the cities where they are located.
“She provides no explanation to support this conclusion,” he wrote. The Federal Court was entitled to conclude that the company’s decisions on this issue were unreasonable. »
The Federal Court went even further, finding that the Old Port had been developed “like an amusement park” that houses places like the Bota Bota Spa and the Science Center, in addition to hosting the Cirque du Sun. According to the trial court, the Old Port had made an “unreasonable” interpretation of the “most exceptions” of the tax rules definition.
On its website, the Old Port says it welcomes more than 6 million visitors annually and boasts, alongside historical attractions, its “magnificent terraces”, its urban beach and its skating rink “among the most beautiful in the country”. It also prides itself on hosting “an array of events”, including “some of international renown such as Cirque du Soleil and Igloofest”.
It remains to be seen what will happen next. The Canada Lands Company, which oversees the Old Port of Montreal Corporation, did not want to say whether it intended to negotiate with the metropolis.
“We are in the process of reviewing their [Federal Court of Appeals] decision and assessing next steps,” its vice president of communications and public affairs, Marcelo Gomez-Wiuckstern, wrote in an email.
The Old Port could turn to the Supreme Court of Canada, but there is no guarantee that the highest court in the country will agree to hear its arguments. On Friday, the City of Montreal would not comment on the turn of events, indicating in an email that the file was still “judicialized”.