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.
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“It is important to everyone in my home province. It is a rare situation for the Senate to consider a constitutional amendment,” he added.
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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.
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
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