Sask. MPs call for swift passage of motion amending Constitution to remove CP rail tax exemption

MPs in Saskatchewan are calling on the federal government to quickly pass a motion that amends the Constitution to strip out a section that exempts Canadian Pacific Railway from paying certain taxes.

The provincial legislature unanimously passed a motion amending the Saskatchewan Act last month, but the House of Commons and the Senate now need to do the same in order for the changes to take affect.

At a news conference on Monday, Reqina-Qu'Apelle MP Andrew Scheer said the federal legislature needs to act quickly and decisively.

Scheer was acting as a spokesperson for the members of the members of the Saskatchewan Conservative Regional Caucus, which introduced a motion in the House of Commons that echoes the Saskatchewan motion.

He said he's confident that all parties can get behind the action.

"Well, I am very hopeful, there's really no philosophical division here.There's no ideological reason for someone to support continuing an exemption for a massively profitable rail company," Scheer said.

At the heart of the change is a 13-year legal battle between Canadian Pacific Railway and the Saskatchewan government over a clause that is older than the province itself.

The national railway company is suing the province for $341 million, saying it wants a return of the taxes it has paid to Saskatchewan since 2002 and a declaration that future taxes are not payable, according to a statement of claim.

The exemption dates back to 1880, and an agreement struck between Canada and CP's predecessor that said a transcontinental railway would be built in exchange for tax-exempt status.

When Saskatchewan was created and joined confederation in 1905, the exemption became part of Section 24 of the Saskatchewan Act, a part of the Constitution.

The provincial government argues the tax exemption came to an end on Aug. 29, 1966, in a letter from then-CP president Ian D. Sinclair to the former federal minister of transport John Pickersgill, in exchange for modernized transportation legislation.

The court battle has yet to be resolved.

On Monday, Scheer said he wouldn't speculate on what affect amending the Constitution would have on the lawsuit, but said it would prevent this from being an issue in the future.

"Whatever justifications may have existed in [1880] to justify a special tax exemption for a railway, in 2021 no such justification can be given," Scheer said.