Federal Conservatives back province on removing CP Rail’s tax exemptions

The federal Conservatives are trying to change part of the Constitution.

MPs from Saskatchewan have put forward a motion to repeal Section 24 of the Saskatchewan Act.

That’s the section the CP Rail company argues exempts it from many taxes in the province.

The company has been in a contentious legal battle with the province for years. CP is suing Saskatchewan to get back $341 million in taxes paid, citing the clause which first appeared in an 1880 contract between Canada and the railway company’s predecessor.

In late November, the provincial government passed a motion in the Legislature to repeal that section of the act.

The goal is to make sure that CP can’t claim it’s tax exempt in the future, and it wouldn’t have an effect on the lawsuit.

Andrew Scheer, former Conservative leader and the MP for Regina-Qu’Appelle, announced the motion at a media conference Monday.

“We are taking up the fight on behalf of our province,” he said.

He explained that, for the provincial government’s motion to go through, it needs the Canadian Parliament to do the same.

His party would need support from Justin Trudeau’s Liberal Party to get the motion passed. Despite Scheer’s and his party’s frequent disagreements with Trudeau, Scheer is hoping they can work together on this.

“We always remain optimistic. Unfortunately, Justin Trudeau has not had a long track record of showing respect to our province,” he said.

“Hopefully, on this one, we can get him to see reason. There’s really no public policy rationale to grant a multi-billion-dollar rail company a tax exemption.”

He also pointed to the effect of not taxing the company on the people of Saskatchewan.

“This would put a tremendous strain on provincial services, something that’s not fair. (It) wouldn’t treat other companies who operate in Saskatchewan fairly, either,” Scheer said.

“One can imagine how unfair that would be, to allow this to continue going forward, where one company … doesn’t have to pay taxes.”

Kevin Waugh, the Conservative MP for Saskatoon-Grasswood, backed up Scheer in a press release Monday.

“The tax loss to Saskatchewan would hurt provincial services. CP Rail is a massively profitable company and there is no reason why it should enjoy an exemption from provincial taxes. There is also no reason why Justin Trudeau should delay in responding to the provincial government’s request,” he said.

— With files from The Canadian Press