ontario regulation 299/25

made under the

Municipal Act, 2001

Made: November 24, 2025
Filed: December 10, 2025
Published on e-Laws: December 10, 2025
Published in The Ontario Gazette: December 27, 2025

Amending O. Reg. 382/98

(PAYMENTS IN LIEU OF TAXES, DISTRIBUTION)

1. Section 1 of Ontario Regulation 382/98 is revoked.

2. Subsections 2 (2) to (5) of the Regulation are revoked and the following substituted:

(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.

(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).

(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.

3. (1) Subsection 3 (1.2) of the Regulation is revoked.

(2) Subsections 3 (2) to (6) of the Regulation are revoked and the following substituted:

(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.

(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.

(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).

4. The French version of subsection 4 (2) of the Regulation is revoked.

5. Sections 6 and 7 of the Regulation are revoked.

6. Table 1 to the Regulation is revoked.

Commencement

7. This Regulation comes into force on the later of January 1, 2026 and the day this Regulation is filed.

Made by:
Pris par :

Le ministre des Finances,

Peter Bethlenfalvy

Minister of Finance

Date made: November 24, 2025
Pris le : 24 novembre 2025