Municipal Act, 2001

Ontario regulation 382/98

formerly under Municipal Act

PAYMENTS IN LIEU OF TAXES, DISTRIBUTION

Consolidation Period:  From January 1, 2026 to the e-Laws currency date.

Last amendment: 299/25.

Legislative History: 427/98, 709/98, 206/99, 630/99, 359/00, 423/02, 212/15, 299/25.

This is the English version of a bilingual regulation.

1. Revoked: O. Reg. 299/25, s. 1.

Sharing with Upper-Tier Municipalities

2. (1) This section provides for the sharing of payments in lieu of taxes between a lower-tier municipality and its upper-tier municipality.  O. Reg. 382/98, s. 2 (1).

(2) A lower-tier municipality that is eligible to receive a payment in lieu of taxes in respect of a property for a year shall pay the upper-tier municipality an amount determined as follows:

1. Calculate the upper-tier taxes that would be payable if the property were taxable by multiplying the assessed value of each portion of the property that is classified in a separate property class by the applicable upper-tier tax rate for that portion.

2. Calculate the total taxes that would be payable if the property were taxable by multiplying the assessed value of each portion of the property that is classified in a separate property class by the applicable upper-tier, lower-tier and, in the case of a payment in lieu of taxes described in subsection (3), school tax rates for that portion.

3. Determine the sharing ratio by dividing the total of the amounts determined under paragraph 1 by the total of the amounts determined under paragraph 2. The sharing ratio is to be calculated to six decimal places.

4. The amount payable by the lower-tier municipality is the amount that results from multiplying the payment in lieu of taxes received by the lower-tier municipality in respect of the property by the sharing ratio determined under paragraph 3. O. Reg. 299/25, s. 2.

(3) The payment in lieu of taxes referred to in paragraph 2 of subsection (2) is a payment in lieu of taxes that meets one of the following conditions:

1. It is paid by a designated electricity utility within the meaning of section 19.0.1 of the Assessment Act or by a corporation referred to in clause (d) of the definition of “municipal electricity utility” in section 88 of the Electricity Act, 1998.

2. It is paid under any of the following:

i. Subparagraph 24 iii of subsection 3 (1) of the Assessment Act or subsection 27 (3) of that Act.

ii. Subsection 4 (3) or (4) of the Municipal Tax Assistance Act.

iii. Section 71 of the Ontario Water Resources Act.

iv. Subsection 84 (2), (3) or (5) of the Electricity Act, 1998.

v. The Payments in Lieu of Taxes Act (Canada). O. Reg. 299/25, s. 2.

(4) Despite anything else in this section,

(a) payments in lieu of taxes based on the tax rates set out in Ontario Regulation 387/98 (Tax Matters — Taxation of Certain Railway, Power Utility Lands) made under the Act shall be shared by the local municipality in accordance with the formula set out in subsection 315 (3) of the Act; and

(b) payments in lieu of taxes based on the tax rates set out in Ontario Regulation 392/98 (Tax Matters — Taxation of Certain Railway, Power Utility Lands) made under the Education Act shall be retained by the local municipality and not distributed to the upper-tier municipality. O. Reg. 299/25, s. 2

(5) Revoked: O. Reg. 299/25, s. 2.

Sharing with School Boards

3. (1) This section provides for the sharing of payments in lieu of taxes between a local municipality and school boards.  O. Reg. 382/98, s. 3 (1).

(1.2) Revoked: O. Reg. 299/25, s. 3 (1).

(2) A local municipality that is eligible to receive a payment in lieu of taxes described in subsection (3) in respect of a property for a year shall distribute, in accordance with subsection 257.8 (2) of the Education Act, an amount determined as follows:

1. Calculate the school taxes that would be payable if the property were taxable by multiplying the assessed value of each portion of the property that is classified in a separate property class by the applicable school tax rate for that portion. For a payment in lieu of taxes described in paragraph 2 of subsection (3), include only those portions of the property in the residential, farm, multi-residential or new multi-residential property class prescribed under the Assessment Act.

2. Calculate the total taxes that would be payable if the property were taxable by multiplying the assessed value of each portion of the property that is classified in a separate property class by the applicable upper-tier, lower-tier and school tax rates for that portion.

3. Determine the sharing ratio by dividing the total of the amounts determined under paragraph 1 by the total of the amounts determined under paragraph 2. The sharing ratio is to be calculated to six decimal places.

4. The amount that must be distributed by the lower-tier municipality is the amount that results from multiplying the payment in lieu of taxes received by the lower-tier municipality in respect of the property by the sharing ratio determined under paragraph 3. O. Reg. 299/25, s. 3 (2).

(3) The payment in lieu of taxes referred to in subsection (2) is a payment in lieu of taxes that meets one of the following conditions:

1. It is paid under subsection 4 (3) of the Municipal Tax Assistance Act in respect of any property.

2. It is paid under subsection 84 (2) or (5) of the Electricity Act, 1998 in respect of a property in the residential, farm, multi-residential or new multi-residential property class. O. Reg. 299/25, s. 3 (2).

(4) The local municipality shall retain the following payments in lieu of taxes for school purposes and shall not distribute them to school boards:

1. Payments in lieu of taxes based on the tax rates set out in Ontario Regulation 392/98 (Tax Matters — Taxation of Certain Railway, Power Utility Lands) made under the Education Act.

2. A payment in lieu of taxes other than one that meets one of the conditions in subsection (3). O. Reg. 299/25, s. 3 (2).

(5), (6) Revoked: O. Reg. 299/25, s. 3 (2))

When Distributions to be Paid

4. (1) A local municipality shall pay the amounts required under this Regulation for a year in four instalments due on or before March 31, June 30, September 30 and December 15 of the year determined in accordance with the following:

1. The first instalment to an upper-tier municipality must be 25 per cent of the amount the local municipality was required to pay the upper-tier municipality in respect of payments in lieu of taxes for the previous year.  The first instalments to school boards must be 25 per cent of the amount the local municipality was required to pay school boards in respect of payments in lieu of taxes for the previous year.

2. The second instalment to an upper-tier municipality or school board must be 50 per cent of the amount the local municipality is required to pay for the year less the amount of the first instalment.

3. The third instalment to an upper-tier municipality or school board must be 25 per cent of the amount the local municipality is required to pay for the year.

4. The fourth instalment to an upper-tier municipality or school board must be equal to the balance of the amount the local municipality is required to pay for the year.  O. Reg. 382/98, s. 4 (1).

(2) Revoked: O. Reg. 212/15, s. 1; O. Reg. 299/25, s. 4.

5. (1) Despite section 4, the council of an upper-tier municipality may, by agreement with a majority of the lower-tier municipalities representing at least two-thirds of the total weighted assessment of the upper-tier municipality, provide by by-law for any number of instalments and their due dates other than those provided in section 4 and those alternative instalments and due dates shall be applicable to all the lower-tier municipalities in the upper-tier municipality with respect to amounts to be paid to the upper-tier municipality under section 2.  O. Reg. 382/98, s. 5 (1).

(2) Despite section 4, a school board may, by agreement with a majority of the local municipalities in its area of jurisdiction representing at least two-thirds of the total weighted assessment of the school board, provide for any number of instalments and their due dates other than those provided in section 4 and those alternative instalments and due dates shall be applicable to all the local municipalities in the area of jurisdiction of the school board with respect to amounts to be paid to the school board under section 3.  O. Reg. 382/98, s. 5 (2).

(3) In subsections (1) and (2),

“weighted assessment” means the assessment for a property multiplied by the tax ratio for the property class the property is in reduced, if section 313 of the Act applies with respect to the property, by the percentage reduction that applies with respect to the assessment under that section.  O. Reg. 382/98, s. 5 (3); O. Reg. 212/15, s. 3.

6., 7. Revoked: O. Reg. 299/25, s. 5.

Table 1 Revoked: O. Reg. 299/25, s. 6.