Important vote tomorrow on the future of Billy Bishop Toronto City Airport

If you live in and around the Greater Toronto Area, you might have seen the newspaper ads over the past few days by the TPA regarding an upcoming vote at Toronto City Council. Over the past few years, the respective Staff at the City and the Toronto Port Authority (owner / operator of the BBTCA) have worked on an agreement regarding the appropriate amount of Payments In Lieu of Taxes that should be assessed against Toronto’s increasingly popular airport.

Every federal agency, whether it be the CBC or the government’s Dominion Public Building on Front Street, pays a PILT to its municipality rather than property tax or something similar. And that PILT is a “voluntary” payment based upon a variety of factors; some of which are still in development before the Courts.

MPAC, the provincial assessor, believes the Billy Bishop airport should have been taxed for the past decade as though it is a condo development site. As the BBTCA airport property has been zoned parkland in the City of Toronto Official Plan since the airport first opened in 1939, the idea that one would tax the site as though someone could ever build a series of condos on the Toronto Islands seems crazy. The airport itself has been governed by the Tripartite Agreement since 1983 (executed by the City, Feds and TPA), which outlines the site’s use as an airport until 2033 — and only as an airport. As such, no condos could be built on the site until at least 2034 in any event. But MPAC wants the condo taxes now, just the same. Just as with your home property taxes, if you don’t agree with MPAC’s approach, you have the right to seek redress; in the Federal context, that falls to the PILT Dispute Advisory Panel.

In 2010, an independent Federal PILT DAP Panel recommended that the Billy Bishop airport be “taxed” in the same way as Pearson Airport: on a per passenger basis. Unlike the BBTCA, Pearson could be turned into a real estate development site, since it is surrounded by homes, low rise office towers and light industrial parks. But then there’d be no where to land larger planes. No where for vacationers to hop a flight to a warmer clime; no where for an entrepreneur to go to catch a flight to visit a potential customer in a far-off land. That’s why Pearson, and most airports across Ontario, pay a “per passenger” PILT.

The DAP panel recommended that BBTCA pay a PILT of $0.80/passenger, as compared to the $0.94/passenger fee that Pearson pays its host municipality. The panel accepted the view that Pearson should pay a higher fee on the basis that 30% of Pearson’s air traffic was cargo in nature, which meant that Pearson pays no fees whatsoever on a huge portion of its daily traffic. Since the BBTCA client base is 100% passenger in nature and has no cargo traffic, a modestly lower fee was recommended by the DAP Panel.

Former Toronto Mayor David Miller didn’t like that outcome, and appealed the ruling to the Federal Court of Canada. The FCC sent the decision back for a new hearing. So, in an effort to get the issue resolved, the TPA offered last year to pay Pearson’s $0.94/passenger rate. In January of this year, City Staff accepted that proposal and recommended it to the City’s Government Management Committee. In late February, the Government Management Committee, chaired by Councillor Paul Ainslie, approved their staff’s $0.94/passenger proposal and recommended it to the entire City Council. That vote is scheduled for tomorrow.

You might have seen anti-airport Councillor Adam Vaughan call this a “multi-million dollar tax break”. If you wanted to close the airport you might understand that thinking, but offering to pay the same per passenger fee as Pearson pays hardly seems to be a “break” to me.

Vaughan went so far as to tell the National Post that I was getting a tax break cum payoff for “defending” the Mayor last week in the media. I did no such thing.

And, since Vaughan’s own City Staff settled the figure with the TPA last January(before the Feb. 23, 2013 Garrison Ball), and had it approved by a Council Committee in February, long before the Toronto Star’s latest story about the Mayor, his timeline doesn’t hang together. Not that that would stop him from throwing mud, of course. As I told the Post, Vaughan “would question the integrity of the late Pope John Paul II if he thought it would serve his political purposes.” Not that I pretend to be infallible, but I’m sure you get the point.

Vaughan’s allies claim the TPA is a “deadbeat” agency, despite the fact that the TPA has paid the City more than $13 million in PILTs for all of the TPA’s properties, including the BBTCA, over the past few years. That’s 100% of what the Federal DAP PILT panel has recommended for the 1999-2012 period. Some deadbeat. Vaughan’s acolytes say the proposed agreement is a “Sweetheart deal proposed to subsidize the Island airport, leads to outlaw Port Authority’s property taxes slashed while your taxes go up”. Nice spin, even if it’s not true. If Vaughan was interested in facts, mind you, he might have taken the time to respond to one of my nine letters regarding his BBTCA falsehoods over the past five years. (I’ve always been amazed how adroit he is at fibbing via his mouth, and yet be so careful to not put anything down on paper in case he ever decides to run for Mayor some day. It’s almost as though he figures the City Hall news media don’t care about the truth unless it involves others on City Council).

According to a recently released Economic Impact Study, the BBTCA generates $1.9 billion of annual economic output, and 5,700 area jobs. How paying the same fee as Pearson counts as a “break” I’ll never know. If the airport didn’t exist, wouldn’t the City would need to find other ways to replace almost $2 billion of economic activity to avoid raising your taxes? The anti-airport tax break argument doesn’t hold water, but it will be interesting to see how certain City Councillors react to the anti-airport spin. Which is bound to come up on the Council floor tomorrow in the form of specious questions from Councillors.

One can hope that the vast majority of Toronto City Councillors will look at the BBTCA’s 2 million passenger figure, up from less than 25,000 in 2005, and embrace this success. After all, it is their constituents who have driven the airport’s fantastic growth. The fact that the airport has been 100% powered by green electricity for the past few years (purchased from Bullfrog Power) should matter to some. Not to mention the 1,700 people employed by Porter across the company, plus the direct employment for 4,500 Canadian Auto Worker members at the Bombardier Q400 plant in Downsview. Jobs that were preserved during the recent recession at Toronto’s largest manufacturing employer by Porter’s multiple aircraft orders. Plus all of the Porter and Sky Regional (Air Canada’s BBTCA carrier) suppliers. Plus the tradespeople currently digging the $82 million pedestrian tunnel, which is being built without a dollar from taxpayers. Plus….

One can only hope.

MPAC wants to tax the airport as though it were a condo development site over the past decade. Even though it is zoned and used otherwise. Every home in Toronto would have a far higher property tax bill if MPAC came after you and taxed your property as a future hire rise condo site, too. You wouldn’t think that was fair, either. Pearson pays a per-passenger fee. Why should Billy Bishop pay taxes on a different scale?

MRM
(disclosure: this post, like all blogs, is an Opinion Piece and reflects a personal opinion that is not reflective of the views or opinions of either the TPA Board, Staff or the Federal Government)