Mayor Lee Brain and Don Krusel

Video and story: Port and city settle their differences with $5.3 million payment

The City of Prince Rupert and the Port of Prince Rupert settled the dispute over payments-in-lieu of taxes with a $5.3 payment to the city.



After years of disagreements between the City of Prince Rupert and the Port of Prince Rupert over payments-in-lieu of taxes, the two parties came to a settlement and the port will pay the city $5.3 million for 2013, 2014 and 2015.

The debate for the past three years has been based on how much payments-in-lieu of taxes, or PILT, the port should pay. The port, as a federal organization, is exempt from paying municipal taxes, however its unleased federal crown lands are subject to the federal PILT Act.

“Those kinds of discussions strain the best of relations,” said Don Krusel, the president and CEO of the Port of Prince Rupert at the annual general meeting on Thursday.

Previously, the port authority had a third-party assessment done on federal lands and paid mill rate based on that valuation but the city believed payments should be based on BC Assessment values.

The two organizations negotiated a settlement of $5.3 million to cover the past three years. Part of the arrangement is to have less uncertainty in the calculation of the PILT payments in the future.

“We’ve come to an agreement how we would jointly value these properties moving forward that will allow for us two organizations to get onto more important tasks to build a world class port and a world class port city,” Krusel said.

The port will work with the city and BC Assessment to avoid potential differences in property valuations.

“We’re happy to reach this negotiated settlement. It was probably our only real point of contention,” said Mayor Lee Brain who spoke briefly at the AGM. “This outcome will allow for better certainty for city budgeting, and more opportunities for collaboration with the port to prepare for growth.”

$3 million joint infrastructure project

The city and the port also agreed to jointly fund a $3 million infrastructure project. The $1.5 million from the city will come from its legacy fund and will go toward launching the Rebuild Rupert program.

A joint committee has been formed between city staff and port staff and together they will go through the list of potential infrastructure projects.

“As Mayor Lee Brain has mentioned often, the community is in an infrastructure deficit so the list is long. It’s just a matter of getting to the right project or projects that both parties feel good about,” Krusel said.

The two parties will also look into a coordinated response to provincial legislation that caps municipal taxation of port terminals.

“The Port Property Tax Cap is an important catalyst for investment in B.C. and, in particular, has been effective in stimulating development at the Port of Prince Rupert,” Krusel said. “We are supportive of reviewing the act to explore whether the framework may be improved to provide more financial certainty to local municipalities.”

Contribution to end train whistling in Port Edward

Another announcement was made at the meeting that set the District of Port Edward at ease. The port will contribute $250,000 to the district toward upgrading four railway crossings in the community, which will put an end to the loud whistling every time a CN train passes through the neighbourhood.

Port Edward council committed to spending $1.5 million to upgrade the crossings at a meeting on June 14, and for months the council has reached out to stakeholders in the area to contribute to the cost.

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