Following three years of back and forth negotiations with the province, the municipal government finally received some good news about the status of the retail sales tax and land transfer tax as it relates to the transfer of the water treatment plant from Vale to the City of Thompson.
In a letter addressed to Mayor Dennis Fenske, Minister of Finance Cameron Friesen wrote that, after much consideration, he decided to authorize the remission of both taxes, which would have cost the city upwards of $1.5 million.
Friesen justified his decision under Section 22(1) of The Financial Administration Act, which specifies that the minister of finance is allowed to forgive any tax, royalty or fee if “it is in the public interest to do so or that hardship or injustice has resulted or is likely to result.”
Fenske said this decision was well-received by members of the legislative and intergovernmental affairs committee at their July 11 meeting, especially since Thompson is facing an unprecedented 700 job losses in the fall.
“We want to thank the province of Manitoba for their consideration in recognizing the economic downturn that we’re experiencing and that this will be another impact to the taxpayers of Thompson,” he said. “So we’re grateful that they recognize that the application of these two taxes would be inappropriate for this transaction.”
Coun. Kathy Valentino, who’s also been heavily involved in these negotiations for the past three years, said that the extraordinary circumstances surrounding the transfer of the water treatment plant also factored into the province’s decision to waive both taxes.
“We are a unique community where an actual industry owns our water treatment plant, so we used that in line with our hardship case,” she said. “This isn’t a common request that they’re getting from [other] municipalities.”
Valentino also pointed out that the province’s decision to forgive these kinds of taxes during this transfer is consistent with similar scenarios in the past, like when ownership of the hospital transitioned from Inco to the city.
“There was no PST or land transfer tax in that transaction,” she said.
This topic will be discussed in more detail during the next Thompson city council meeting, which takes place at 7 p.m. July 17 at City Hall.
