The City of Ottawa has found more than $564,000 in back taxes are no longer able to be recovered and staff are recommending councillors approve writing it off.
A report prepared for the Oct. 1 Finance and Corporate Services Committee meeting says around 99 per cent of billed property taxes in Ottawa are collected and paid in the same year, with the outstanding 1 per cent being paid in following years through various collection methods, such as legislated notices, phone calls, and tax sales.
Some taxes, however, are never recovered for a variety of reasons.
The report says that there is an outstanding balance of $564,254 that cannot be collected and should be written off the tax roll.
“Staff have determined that taxes billed on 190 properties are uncollectible or no longer payable and should be written-off,” the report says.
Of that amount, $430,493 would have gone into city coffers, while the remaining $133,761 was intended for the school boards.
This total represents a fraction of a per cent of the city’s overall tax income. The report says the City of Ottawa invoiced approximately $2.58 billion in municipal and education taxes in 2024.
The reasons for the recommended write-offs include an unsuccessful tax sale on a property that owed $12,005, disputes over taxes on properties owned by other levels of government or Crown corporations totalling $62,623, and $489,626 worth of unpaid taxes dating back to the 1980s that can no longer be collected or subjected to a tax sale.
“Some deleted tax rolls had unpaid taxes from pre-amalgamation periods in the former municipalities, dating back to the 1980s and 1990s. Over the last 10 years staff have researched, apportioned and collected as much as was feasible to collect. Since there is no longer a property tied to a deleted roll number, the City no longer has the option to sell the property to recover taxes and therefore must employ other mechanisms to try and recover the funds,” the report said.
The city was able to collect on $1.9 million in unpaid taxes linked to 95 properties, but the remaining $489,626 has been deemed uncollectable.
“Properties that would receive the unexpected tax bills for the apportionment may have changed ownership since the original severance. Holding the current owners responsible for taxes dating back several decades might not be fair, especially when they were not part of the original severance process,” staff said.
“Imposing tax burdens retroactively without proper notice could be considered procedurally unfair. The concept of fairness and a ‘window of reasonableness’ was also considered. Going back too far in time to collect unpaid taxes may be seen as unfair or punitive, and there might be a reasonable limit to the retroactive application of tax obligations.”
Staff also said there were practical constraints in obtaining historical severance information dating back 30 to 40 years.
With regard to government properties, staff said the properties in question are tenanted spaces that were billed as regular taxes as required by law.
“Since these are regular taxes, the City cannot challenge non-payment through the Dispute Advisory Panel as they are not PILTs (payments in lieu of taxes). On the other hand, these properties cannot be sold to recover tax arrears as they are government owned. Many unfruitful discussions and negotiations have been held with the responsible government entities. Since no further collection efforts on these properties are possible, staff recommend that the taxes levied on these properties be written off as the City can no longer collect them,” the report says.
The report did not say which properties or owners owed the back taxes, citing confidentiality of personal information.
Upon approval by committee, it will go to full city council for final approval, at which point, Revenue Services will ensure all the necessary adjustments are applied to the property tax accounts.