06/15/2012 01:14 EDT | Updated 08/15/2012 05:12 EDT

Supreme Court tells feds: pony up more cash for historic sites

OTTAWA - The federal government will have to dig into its pockets and pay more in municipal taxes for historic sites, following a Supreme Court decision rendered Friday.

The country's top court has sided with the city of Halifax, against the federal government, in a tax case involving the Citadel Hill site.

The case has repercussions on other municipalities with historic sites.

Halifax values the Citadel land at $42 million — which is eight times more than the federal evaluation. That's because Ottawa says the lion's share of the land is only worth $10, since it has no commercial value.

The court rejected that argument. It has sent the file back to the Department of Public Works and asked it to come up with a more equitable valuation.

"It can hardly be thought either fair or equitable to conclude that 42 acres in the middle of a major metropolitan centre has no value for assessment purposes," the court judgment said.

Halifax Mayor Peter Kelly issued a statement saying the city was pleased with the ruling.

“This is a big win for our municipality and for every residential and commercial property owner ... who has been expected to pay taxes while Citadel Hill has paid an unreasonably low sum,” he said.