REGINA — The basis of a lawsuit between Canadian Pacific Railway Ltd. and the Saskatchewan government is moving to the floor of Parliament after provincial legislature members passed a motion to amend the Constitution.
© Provided by The Canadian PressCanadian Pacific is suing the province for $341 million over a clause that was written in a contract so old John A. Macdonald was prime minister and Saskatchewan wasn’t yet a province.
The court battle, which has been going on for 13 years, is currently being argued at trial in Regina’s Court of Queen’s Bench.
In its statement of claim, CP says it wants a return of taxes paid to Saskatchewan since 2002 and a declaration that future taxes are not payable.
The corporation argues it's exempt from paying certain taxes based primarily on a 1880 contract between Canada and CP’s predecessor. In exchange for tax exemptions, CP agreed to build the transcontinental railway.
“In exchange for CP’s investments and commitment to build and to operate this railway forever, the prairie provinces and federal government agreed to certain tax exemptions for business conducted on this main line,” CP spokesman Patrick Waldron said in an email.
The exemption became part of the Saskatchewan Act in the Constitution, when the province was created 116 years ago.
However, Saskatchewan argues the tax exemption was rescinded on Aug. 29, 1966, in a letter from then-CP president Ian D. Sinclair to the federal transport minister, John Pickersgill, in exchange for modernized transportation legislation.
The trial, which began four weeks ago, is scheduled wrap up in mid-December.
On Monday, the Saskatchewan government unanimously made a resolution to amend the Constitution as it relates to the Saskatchewan Act.
"It would be unfair to the residents of Saskatchewan if a major corporation were exempt from certain provincial taxes, casting that tax burden onto the residents of Saskatchewan,” the motion reads.
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