An offer by CP Rail to obtain a tax holiday due to an 1880 contract was rejected by a federal judge.
The Blacklock Reporter said the railroad paid $ 758 million in income taxes last year.
“Canadian Pacific has paid,” wrote Justice Alan Diner, noting that the 141-year-old contract was signed decades before Parliament or the provinces introduced corporate income tax.
CPR lawyers have been appearing in court since 2007 to try to enforce a clause in the historic contract that led to the construction of Canada’s first transcontinental railroad.
The terms included a $ 25 million grant, 25 million acres of free land, and a 20-year monopoly on prairie rail service.
It also included section 16 which stipulated that the railway “shall forever be exempt from taxation by the Dominion or by any province”.
“Canadian Pacific maintains that when ‘forever’ and ‘imposition’ have their ordinary meaning, section 16 is a universal exemption from all forms of taxation,” wrote Diner, who called it an “extraordinary measure.” Which “cannot be translated” into a perpetual tax holiday.
On February 15, 1881, Parliament passed the Canadian Pacific Railway Act who incorporated the contract into law. It has never been repealed.
“Beginning in 1880, the federal government did not directly tax the income of individuals or corporations,” Diner wrote.
“There was indirect federal taxation,” mainly tariffs on imported kerosene and a federal excise tax on rum.
“Since the creation of the Canadian Pacific Railway, new taxes have been introduced by different levels of government. “
Federal attorneys have argued that the railroad has paid taxes for over a century without protest, and that it “has lost its right to do so” now, including charges under the 1908 Act. Saskatchewan Railways Taxation Federal War Measures Act 1914 War Business Income Tax Act 1916 War Tax Act 1917 income and GST under the Excise Tax Act of 1991.
Canadian Pacific has identical lawsuits pending in the provincial courts of Alberta, Saskatchewan and Manitoba.
A 1917 Royal Commission on Railways wrote that Canadian taxpayers were generous with the Canadian Pacific Railway.
“People have been liberal in promoting railroad construction,” the commission wrote.
Cash grants from 1880 to 1917 totaled the modern equivalent of $ 1.1 billion, along with tariff exemptions, easy-term loans, and free land.