A simmering dispute worth more than $10-million dollars between Manitoba Hydro and the City of Winnipeg seems to be cooling.
When Hydro took over the city utility in 2002, part of the deal was that the crown corporation would collect a tax and give it back to the city. But a recent audit showed the city was short-changed.
The city’s position was that we were applying it incorrectly, that it should’ve been applied after the GST was applied, said Manitoba Hydro’s Glenn Schneider. “So it should’ve been a tax on a tax.
Winnipeggers may have been saving money on their electricity and gas bills at the expense of the city.
The city says the utility giant has been collecting the municipal tax incorrectly to a tune of $10.6-million.
That remittance in tax was never made,” said St. Vital Councillor, Gord Steeves. “And that’s why it resulted in a $10-million lawsuit.
In 2009, the city took Manitoba Hydro to court and was so confident they would get the money that they listed it as a multi-million dollar receivable in their 2010 budget.
We asked for $10-million because we thought that was the amount of the debt,” said Steeves. We were told at the time by our critics that we should expect zero.
On Monday, the city announced it and Hydro have settled outside of court. Hydro will pay the city $5.3-million and the city will drop its lawsuit.
You have a potential to take the matter to court, in which case you’re incurring a lot of cost in terms of legal fees and court time,” said Schneider.
The extra money will be added to the city’s operating budget, potentially saving Winnipeggers from a 1.5 per cent tax hike.
Hydro says they’ll find the money in their general revenues and not the pockets of Winnipeggers.
They’re not going to be punished in any way,” said Schneider. “They’re going to be paying tax the same way they did before with no increase in taxation rate for them.
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