Taz Dhaliwal -
Global News
Saskatchewan senators are responding to the adoption of an amendment to the Saskatchewan Act in Ottawa last Thursday.
Last week, the Senate of Canada completed the final step of a three-part process and adopted Conservative Motion No. 14, a resolution that authorizes an amendment to the Constitution of Canada.
The act previously exempted Canadian Pacific Railway from certain Saskatchewan taxes due to the capital investments its predecessor made in 1880 to complete the coast-to-coast railway.
One of the many subsidies provided to the CPR to build the railway was an exemption from provincial and municipal taxes on the CPR’s main line.
This tax exemption was supposed to last “forever.” When the Province of Saskatchewan was created in 1905, Ottawa included the tax exemption in the Saskatchewan Act, the constitutional document that created the province.
“This motion places the Canadian Pacific Railway (CPR) in the same position as other taxpayers and ends a century old tax exemption for the CPR imposed on Saskatchewan when the province was formed in 1905,” said Saskatchewan Senator Brent Cotter in a release.
“It is important to everyone in my home province. It is a rare situation for the Senate to consider a constitutional amendment,” he added.
The senator also said he is proud of the work senators and the Standing Senate Committee on Legal and Constitutional Affairs did to better inform the decision-making process and “ultimately support the resolution, the people of Saskatchewan, and tax fairness in Canada.”
All five Saskatchewan senators and a vast majority of the Senate supported the amendment.
“To continue with a tax exemption in the 21st century, which was granted to the CPR in the 19th century, would be fundamentally unjust, unfair, unreasonable and an undeserved economic hardship on the residents of Saskatchewan,” said Saskatchewan Senator David Arnot.
Arnot said he is pleased this “inequity” has been corrected.
Read more:
Conservatives call on feds to repeal CP Rail tax exemption in Saskatchewan Act
According to the release, removing the provision from the Saskatchewan Act required consent from the Senate, the House of Commons and the legislature of Saskatchewan, in accordance with section 43 of the Constitution Act, 1982.
On Nov. 29 of last year, the Legislative Assembly of Saskatchewan unanimously adopted a resolution to repeal section 24 of the Saskatchewan Act.
Subsequently, parallel resolutions authorizing the proposed amendment of the Constitution of Canada were adopted by the House of Commons on Feb. 9, and the Senate of Canada on April 7.
CP Rail is currently suing the province for $341 million in relation to the clause, saying it wants a return of the taxes paid since 2002 and a declaration that future taxes are not payable.
The Saskatchewan government says the exemption ended in 1966 when CP’s president rescinded the deal in exchange for regulatory changes.
Section 24 of the Saskatchewan Act has now been repealed retroactively to Aug. 29, 1966.
– with files from Global News' David Giles and Ryan Kessler
CP to no longer be exempt from Saskatchewan taxes
Canadian Pacific Railway (CP) will no longer be exempt from multiple provincial taxes after the Senate recently passed a constitutional amendment.
© Provided by Leader PostA file photo of Canadian Pacific Railway train outside Regina.
Jeremy Simes - Yesterday
Leader Post
The decision, which was made on April 7, may also weaken the rail company’s court case against the province, according to Saskatchewan Senator Brent Cotter.
“They (CP) can’t rely on it anymore. It has basically disappeared from the constitution,” Cotter said in an interview. “CP may have other arguments in the court case, but it can’t assert that it’s constitutionally protected from paying provincial taxes.”
The amendment repeals Section 24 of the of the Saskatchewan Act retroactively to August 29, 1966, which means CP no longer has provincial tax exemptions.
The decision comes after CP took the province to court in November, arguing it doesn’t have to pay $341 million in provincial taxes because of a contract that later became legislation.
Even though CP had still paid taxes for a century, it argued it wants to recover what it calls unconstitutional taxes going back to 2002.
While it’s unclear what the Senate’s decision means for the court case, CP said in a statement on Tuesday it will carefully review the actions taken by the House of Commons and the Senate.
“CP has a fiduciary duty to its shareholders to protect the company’s rights,” the company stated. “CP fulfilled its commitments under the 1881 agreement. CP has a valid legal right to uphold the bargain that was struck, and is now asking the courts to ensure that the governments honour their commitments.”
Justice Minister Gordon Wyant told reporters he’s pleased the Senate passed the resolution.
He said he thinks CP’s case against the government will now be weaker.
“I think we stand on very, very good legal ground when it comes to the defence of the interests of the province against the CPR,” Wyant said. “I think this constitutional amendment underscores the fact that we’re an equal partner, certainly when it comes to the taxation of the CPR.”
CP stated it has been willing to discuss a “win-win” solution for the company and provinces affected by the agreement.
It added it continues to pay “significant amounts of tax” across Canada. This matter won’t affect how it does business, CP said.
Wyant said the province’s legal team has been in touch with lawyers representing CP.
He was unable to provide a date on when the matter is back in court, given both parties were waiting on this decision.
Cotter, a former dean of the College of Law at the University of Saskatchewan, explained the approval in the Senate means the changes take immediate effect. He said it’s not like other laws that require royal assent.
He said the vote in the Senate was not unanimous, though there wasn’t a count on how each senator voted.
The House of Commons and the Legislative Assembly of Saskatchewan voted unanimously in favour of proceeding with the amendment.
“In terms of tax fairness, I think it’s the right thing to do,” Cotter said.
He said he believes this is the first time a constitutional amendment has passed that’s applicable to a Western province.
Constitutional amendments can be a lengthy process as they require support from a provincial legislature, the House of Commons and the Senate.
“It’s genuinely a Saskatchewan success,” Cotter said. “There are people — and sometimes I’m included in that — who have reservations about the value of a Senate. But it felt like on this occasion, five Saskatchewan senators and the whole Senate got good work done on behalf of the people of Saskatchewan.”
jsimes@postmedia.com
Canadian Pacific Railway (CP) will no longer be exempt from multiple provincial taxes after the Senate recently passed a constitutional amendment.
© Provided by Leader PostA file photo of Canadian Pacific Railway train outside Regina.
Jeremy Simes - Yesterday
Leader Post
The decision, which was made on April 7, may also weaken the rail company’s court case against the province, according to Saskatchewan Senator Brent Cotter.
“They (CP) can’t rely on it anymore. It has basically disappeared from the constitution,” Cotter said in an interview. “CP may have other arguments in the court case, but it can’t assert that it’s constitutionally protected from paying provincial taxes.”
The amendment repeals Section 24 of the of the Saskatchewan Act retroactively to August 29, 1966, which means CP no longer has provincial tax exemptions.
The decision comes after CP took the province to court in November, arguing it doesn’t have to pay $341 million in provincial taxes because of a contract that later became legislation.
Even though CP had still paid taxes for a century, it argued it wants to recover what it calls unconstitutional taxes going back to 2002.
While it’s unclear what the Senate’s decision means for the court case, CP said in a statement on Tuesday it will carefully review the actions taken by the House of Commons and the Senate.
“CP has a fiduciary duty to its shareholders to protect the company’s rights,” the company stated. “CP fulfilled its commitments under the 1881 agreement. CP has a valid legal right to uphold the bargain that was struck, and is now asking the courts to ensure that the governments honour their commitments.”
Justice Minister Gordon Wyant told reporters he’s pleased the Senate passed the resolution.
He said he thinks CP’s case against the government will now be weaker.
“I think we stand on very, very good legal ground when it comes to the defence of the interests of the province against the CPR,” Wyant said. “I think this constitutional amendment underscores the fact that we’re an equal partner, certainly when it comes to the taxation of the CPR.”
CP stated it has been willing to discuss a “win-win” solution for the company and provinces affected by the agreement.
It added it continues to pay “significant amounts of tax” across Canada. This matter won’t affect how it does business, CP said.
Wyant said the province’s legal team has been in touch with lawyers representing CP.
He was unable to provide a date on when the matter is back in court, given both parties were waiting on this decision.
Cotter, a former dean of the College of Law at the University of Saskatchewan, explained the approval in the Senate means the changes take immediate effect. He said it’s not like other laws that require royal assent.
He said the vote in the Senate was not unanimous, though there wasn’t a count on how each senator voted.
The House of Commons and the Legislative Assembly of Saskatchewan voted unanimously in favour of proceeding with the amendment.
“In terms of tax fairness, I think it’s the right thing to do,” Cotter said.
He said he believes this is the first time a constitutional amendment has passed that’s applicable to a Western province.
Constitutional amendments can be a lengthy process as they require support from a provincial legislature, the House of Commons and the Senate.
“It’s genuinely a Saskatchewan success,” Cotter said. “There are people — and sometimes I’m included in that — who have reservations about the value of a Senate. But it felt like on this occasion, five Saskatchewan senators and the whole Senate got good work done on behalf of the people of Saskatchewan.”
jsimes@postmedia.com
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