The City of Cold Lake, Alta., says it continues to pursue roughly $20 million it believes is owed after a federal court found the municipality’s flagship military base was undervalued for Payments in Lieu of Taxes (PILT).
Background and legal finding
On July 23, 2025, the Federal Court of Appeal ruled that Canada’s busiest fighter base, Canadian Forces Base (CFB) Cold Lake, had been underestimated by a former minister in the valuation used to determine PILT amounts. The city says the assessment approach has undercounted the base’s value since 2012, producing what it describes as a multi‑million‑dollar shortfall.
The federal government does not pay municipal property taxes directly for federally owned land. Instead, Ottawa makes PILT payments intended to compensate municipalities for services such as roads, water and sewer that they provide to federal properties.
What Cold Lake says is at stake
Cold Lake’s chief administrative officer, Kevin Nagoya, told reporters the methodology used by the federal government to assess bases has been problematic, in particular the deduction of infrastructure costs the department itself owns.
“They don't really have a sound rationale of their assessment criteria, and that's why you see an issue between Cold Lake and the Government of Canada,” said Kevin Nagoya.
The city contends that by deducting the cost of infrastructure such as water and sewer — assets that remain under federal ownership — the assessed value of the base is artificially depressed, reducing the PILT the municipality receives.
Federal response and outstanding decision
Officials in Cold Lake say more than a year after the appeals court decision a new federal determination has not been issued. The federal government has told the city it is working on a revised decision concerning how bases are assessed for PILT purposes.
Cold Lake estimates the base has been undervalued for more than a decade and that the town is due about $20 million in missed payments. The municipality says that shortfall reflects funds it has effectively covered while continuing to provide municipal services for the base and its population.
Implications beyond Cold Lake
Municipalities across Canada that host federal facilities monitor PILT arrangements closely because the payments can be significant for local budgets. A change in how federal properties are assessed could have consequences for other communities that provide services to military bases, federal laboratories, Crown-owned ports and other federal installations.
- Key date: July 23, 2025 — Federal Court of Appeal ruling in favour of Cold Lake.
- Period contested: City says undervaluation has occurred since 2012.
- Estimated amount owed: about $20 million, according to the City of Cold Lake.
| Item | Detail |
|---|---|
| Federal court decision | July 23, 2025 — found base was undervalued |
| Contested timeframe | Since 2012 |
| City estimate of shortfall | About $20 million |
Cold Lake officials say they await formal federal direction on how the assessment framework will be amended and whether back payments will be made. For municipalities, the issue underscores ongoing tensions around how Ottawa compensates local governments for providing services to federally owned properties.
For now, the city is left balancing municipal budgets and pushing for clarity so it can recoup what it says are funds owed for more than a decade of service provision to a key military installation in northern Alberta.
