Citadel Hill tax battle in court

A 10-year tax battle between the Halifax Regional Municipality and Ottawa over Citadel Hill is in court Tuesday.

The dispute is over the assessed value of the National Historic Site property in the heart of the city.

Municipal officials say its assessed value should be about $41 million, but federal officials only want to pay a grant in lieu based on an assessment of less than $5 million.

"The Citadel property is a little bit better than 48 acres, and the federal government's perspective on it is that 42 out of the 48 [acres] should be assessed at something pretty close to zero value," Mary Ellen Donovan, a lawyer with the municipality said Tuesday.

"Needless to say, the municipality's perspective is quite different."

The other issue at play is the federal finance minister's power to decide how much money the federal government pays municipalities.

Halifax had appealed a decision by a dispute panel to the Federal Court of Canada, which ruled in Halifax's favour. But, last fall Ottawa took that decision to the Federal Court of Appeal.

 An all day hearing on the matter is scheduled in a Halifax courtroom, but there likely won't be a decision until fall. 

The municipality says it has an outstanding tax bill for the Citadel Hill property worth $7 million dating back to the mid-1990s.