April 19, 2010; The Record | If you think nonprofits in the States have it tough with local governments asking nonprofits for tax payments, in Canada even the federal government isn’t tax exempt. The City of Montreal sued the federal government unsatisfied that Ottawa gave the cities payments in lieu of taxes (PILOTs) for prisons, post offices, and port facilities that Montreal deemed inadequate.

Though it appears neither cities’ hockey teams will make it out of the first round of the Stanley Cup playoffs, in this Canadian Supreme Court battle, Montreal is the winner over Ottawa. It’s not clear from the article, however, exactly how much more the cities will get.  The City of Kitchener, Ontario, collected $650,000 in 2009 in PILOTs on 12 federal properties.

Kitchener said that was $5,000 less in property taxes than private-sector owners would have paid for the same land and buildings.  It doesn’t sound like much, but the complaint of the Federation of Canadian Municipalities was in part that they didn’t know exactly how the feds calculated what they would pay as PILOTs.

Payments to the city of Cambridge, the Record says, will “increase at least a little.” Is this a ruling that U.S. cities are looking toward regarding their future revenue-raising strategies?—Rick Cohen