Payment in lieu of taxes (PIL or PILT) is a payment made by the federal or provincial governments to compensate a municipal government for some or all of the property tax revenue lost due to the federal and provincial governments being exempt from property taxation under the Constitution:
No Lands or Property belonging to Canada or any Province shall be liable to Taxation.
Section 125 of the Constitution Act, 1897
However, municipalities must still provide the infrastructure needed to service these properties (roads, water, wastewater, etc.).
To address this funding gap, the federal government introduced PILTs in the Payments in Lieu of Taxes Act of 1985. The Government of Ontario introduced PILTs in the Municipal Tax Assistance Act of 1990.
These PILT programs are voluntary and their calculations can be modified, leading situations where local governments receive smaller payments than requested based on their assessed property values. In 2024, Ottawa Council, estimated it received $95 million less in PILTs than it should have from the federal government.
In 2025, the City of Belleville received $2,607,490 in PILT payments:
Federal government
Public Services and Procurement Canada administers the federal government’s Payments in Lieu of Taxes Program and distributes approximately $600 million every year on about 14,000 federal properties under the responsibility of over 1,100 taxing authorities across the country. In 2024, payments totaled $628,569,956.03.
We make payments in lieu of taxes to recognize the services we receive from municipal governments and to pay our share of the costs to municipalities where our property is located.
The federal government is exempt from taxation under the Constitution, so these payments are made at the discretion of the Minister of Public Services and Procurement or the heads of Crown corporations.
In 2024, Belleville received $580,057.01 from the federal government:
Ontario government
The Minister, in respect of provincial property owned by the Crown in right of Ontario and not occupied by a Crown agency, may pay in each year to the municipality in which the property is situate an amount equal to the tax for municipal purposes that would be payable if the property were taxable.
Section 4 of the Municipal Tax Assistance Act
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