Senator Gold: Again, thank you for your question. I actually don’t know whether there is a copy of that agreement, but there was an agreement — at least, I’ve been advised there was an agreement. I will make inquiries as to whether there was. If there is one and it is public, I would be happy to share it.

Senator Gold: To ensure that I give you the right response, I will add this question to the ones you asked me and I will come back to you with the answers as soon as possible.

Senator Gold: Yes.

Hon. Raymonde Saint-Germain: Senator Gold, would you take another question?

Hon. Denise Batters: Senator Gold, that might have been my favourite speech that I’ve heard you deliver in this chamber.

Senator Gold: I aim to please.

Senator Gold: Of course.

Hon. Marc Gold (Government Representative in the Senate) introduced Bill S-5, An Act to amend the Canadian Environmental Protection Act, 1999, to make related amendments to the Food and Drugs Act and to repeal the Perfluorooctane Sulfonate Virtual Elimination Act.

(Bill read first time.)

Hon. Marc Gold (Government Representative in the Senate), pursuant to notice of February 8, 2022, moved:

Whereas on October 21, 1880, the Government of Canada entered into a contract with the Canadian Pacific Railway Syndicate for the construction of the Canadian Pacific Railway;

Whereas, by clause 16 of the 1880 Canadian Pacific Railway contract, the federal government agreed to give a tax exemption to the Canadian Pacific Railway Company;

Whereas, in 1905, the Parliament of Canada passed the Saskatchewan Act, which created the Province of Saskatchewan;

Whereas section 24 of the Saskatchewan Act refers to clause 16 of the 1880 Canadian Pacific Railway Contract;

Whereas the Canadian Pacific Railway was completed on November 6, 1885, with the Last Spike at Craigellachie, and has been operating as a going concern for 136 years;

Whereas, the Canadian Pacific Railway Company has paid applicable taxes to the Government of Saskatchewan since the Province was established in 1905;

Whereas it would be unfair to the residents of Saskatchewan if a major corporation were exempt from certain provincial taxes, casting that tax burden onto the residents of Saskatchewan;

Whereas it would be unfair to other businesses operating in Saskatchewan, including small businesses, if a major corporation were exempt from certain provincial taxes, giving that corporation a significant competitive advantage over those other businesses, to the detriment of farmers, consumers and producers in the Province;

Whereas it would not be consistent with Saskatchewan’s position as an equal partner in Confederation if there were restrictions on its taxing powers that do not apply to other provinces;

Whereas on August 29, 1966, the then President of the Canadian Pacific Railway Company, Ian D. Sinclair, advised the then federal Minister of Transport, Jack Pickersgill, that the Board of the Canadian Pacific Railway Company had no objection to constitutional amendments to eliminate the tax exemption;

Whereas section 43 of the Constitution Act, 1982 provides that an amendment to the Constitution of Canada may be made by proclamation issued by the Governor General under the Great Seal of Canada where so authorized by resolutions of the Senate and House of Commons and of the legislative assembly of each province to which the amendment applies;

Whereas the Legislative Assembly of Saskatchewan, on November 29, 2021, adopted a resolution authorizing an amendment to the Constitution of Canada;

Now, therefore, the Senate resolves that an amendment to the Constitution of Canada be authorized to be made by proclamation issued by Her Excellency the Governor General under the Great Seal of Canada in accordance with the annexed schedule.

SCHEDULE

AMENDMENT TO THE CONSTITUTION OF CANADA

1.Section 24 of the Saskatchewan Act is repealed.

2.The repeal of section 24 is deemed to have been made on August 29, 1966, and is retroactive to that date.

CITATION

3.This Amendment may be cited as the Constitution Amendment, [year of proclamation] (Saskatchewan Act).

He said: Honourable senators, it’s an honour for me to rise and move Government Motion No. 14, dealing with the proposed constitutional amendment in relation to Saskatchewan.

I want to begin by acknowledging and thanking our colleague Senator Cotter, who is the seconder of this motion, for having brought this to the chamber’s attention, and to all my colleagues from Saskatchewan for their work on this matter.

Before I begin, I would like to put on the record a correspondence I received yesterday from the Honourable David Lametti, Minister of Justice and Attorney General of Canada, which serves as the genesis of the motion before you:

Dear Senator Gold,

Today, the House will consider an important constitutional amendment to the Saskatchewan Act, S.C. 1905, c. 42., which forms part of our Constitution. As you are aware, on November 29, 2021, the Legislative Assembly of Saskatchewan unanimously adopted a resolution to amend the Act, thus initiating a constitutional amendment process through the bilateral formula found in s. 43 of the Constitution Act, 1982. The amendment aims to remove a historical exemption from provincial and municipal taxes granted to Canadian Pacific Railway (CPR) in the Saskatchewan Act, as a result of a prior agreement between the federal government and CPR. The Government will be supporting this vital amendment to support the Province of Saskatchewan and its economy. The amendment will promote tax and fiscal fairness, as well as cooperative federal provincial relations that would be beneficial to national unity. The amendment would also have the benefit of reflecting in the law the ongoing practice whereby CPR, despite its historical tax exemption, has been paying taxes to the province of Saskatchewan. To have the constitutional amendment proclaimed by the Governor General, we would need a motion in both the House of Commons and the Senate. We look forward to its speedy passage in the House. I understand that senators are already alive to the issue in light of the motion put on notice by Senator Brent Cotter. I would like to encourage the Senate to take this issue up with alacrity. It is important to the people of Saskatchewan that this issue be resolved. Our Government is proud to have worked with the Province of Saskatchewan to advance this motion and looks forward to the proclamation of the constitutional amendment.

[Translation]

Honourable colleagues, allow me to provide some context. A resolution authorizing the proposed amendment has already been adopted by the Legislative Assembly of Saskatchewan. If the resolution is then authorized by the Senate, the amendment will repeal a provision of the Saskatchewan Act, which was passed by Parliament in 1905 but is now an integral part of the Constitution of Canada. The government is proud to support this constitutional amendment that seeks to ensure fairness in Saskatchewan’s tax system.

[English]

As honourable senators know, this amendment uses the bilateral constitutional amendment procedure as set out in section 43 of the Constitutional Act, 1982. It states that an amendment to the Constitution of Canada, in relation to a provision that applies to one or more but not all provinces, may be made by a proclamation issued by the Governor General where authorized by resolutions of the Senate and the House and of the legislative assembly of each province to which the amendment applies. The provision that would be amended, section 24 of the Saskatchewan Act, only applies to Saskatchewan; and the legislative assembly of the province to which the amendment applies, the Legislative Assembly of Saskatchewan, has authorized the amendment, as has the House of Commons. It is now up to us to determine whether to adopt resolutions authorizing the same amendment that is the repeal of section 24.

The bilateral constitutional amendment procedure has previously produced seven constitutional amendments. Four of them concerned Newfoundland and Labrador, one changing the name of the province to include Labrador in 2001 and three changing the denominational schools provision of the Terms of Union in 1987, 1997 and 1998. One was made at the request of Quebec to remove their application so as to favour the organization of school boards along linguistic lines, this in 1997. One was made at the request of New Brunswick in 1993 and added section 16.1 to the Canadian Charter of Rights and Freedoms, and thus recognized in the constitution the equality of the English and French linguist communities in that province. Lastly, one was made at the behest of Prince Edward Island in 1993 to remove the requirement in the Terms of Union for Canada to maintain a ferry service, thereby facilitating the substitution and construction of Confederation Bridge to the mainland.

[Translation]

The amendment would repeal, retroactive to August 29, 1966, section 24 of the Saskatchewan Act, the enactment that created the Province of Saskatchewan. This section of the law purports to subject Saskatchewan’s constitutional powers to clause 16 of an agreement dating back to 1880 between the Government of Canada and the founders of the Canadian Pacific Railway. This clause exempted the CPR from certain federal, provincial and municipal taxes indefinitely.

Despite the tax exemption, in 1966 CP agreed to pay the applicable taxes. More recently, CP took legal action against all the governments concerned to reassert its historic tax exemption.

[English]

Saskatchewan’s concerns regarding section 24 are threefold. First, Saskatchewan is of the view that it would be inconsistent with the province’s position as an equal partner in Confederation if the provision restricted Saskatchewan’s taxation powers relative to those of the other provinces of Canada.

Second, Saskatchewan believes that it would be unfair to other businesses operating in the province, including small businesses, if a major corporation were exempt from certain provincial taxes, providing that corporation a significant competitive advantage over those other businesses to the detriment of farmers, consumers and producers in the province.

Third, Saskatchewan asserts that it would be unfair to the residents of Saskatchewan if a major corporation were exempt from certain provincial taxes, casting an additional tax burden onto the people of Saskatchewan.

Back in 1880, this tax exemption for a single large corporation may very well have been appropriate as it was intended to recognize and encourage CPR’s investments in the construction of the trans-Canadian rail network in the late 19th century. As such, it was just one of the incentives that Canada offered to CPR to build Canada’s first cross-country railway in fulfillment of a promise made to British Columbia for joining Confederation.

[Translation]

The government is of the opinion that Saskatchewan should be able to impose taxes within its provincial boundaries as it deems appropriate. The government agrees with its Saskatchewan counterpart that other taxpayers in the province should not bear a heavier tax burden as a result of a single large corporation benefiting from an exceptional exemption from provincial taxation. The government also agrees that there should be a level playing field between all businesses operating in Saskatchewan’s transportation industry.

[English]

As we all know, the completion of this railway was fundamental to the birth of our nation and the subsequent rapid growth and development of our economy. The “Last Spike” uniting east and west is an iconic representation of our national heritage and unity. Thank you, colleagues, and I urge speedy adoption of this resolution.

Senator Gold: Yes, gladly. I apologize for not having that information with me, but I will make inquiries and report back to the chamber with more details. I will be available to answer your questions.

[English]

Senator Gold: I do not know how much was paid or the date the payments began. I will try to find out. I invite my other colleagues to talk about that when they rise to speak.

According to the information I have, Canadian Pacific pays taxes to the federal government. However, that is not the issue. We are talking about provincial and municipal taxes. Essentially, it is the municipal taxes that are at issue. That is all the clarification I can provide. I can’t say more. I don’t have the information, the amounts or the details.

[English]

Senator Gold: Thank you, senator. You’re far more intimately involved with the history of this than I would be, considering where I come from. It is true. Thank you for underlining the fact that this has been a matter of some concern for the people and the Government of Saskatchewan, regardless of their political stripe. Indeed, elsewhere in the Prairies it has been a concern.

That it has come to a head is a good thing, at least from the point of view of the Government of Canada, so that it can partner with the Province of Saskatchewan to address this historical inequity.