Written with files from Shawn Slaght/Discover Moose Jaw

A 140-year-old agreement between the federal government and the Canadian Pacific Railway will be coming to an end. 

Supported unanimously both at the provincial and federal levels, an amendment passed the House of Commons this week to remove section 24 of the Saskatchewan Act in the Constitution of Canada. 

“The success of today’s motion is welcome news to the people of Saskatchewan. Conservatives have said from the beginning that we will always respect the jurisdiction of our provinces and their right to amend their respective constitutions."

That statement, and others from earlier in the week, comes courtesy of local MP Jeremy Patzer from the duo of Kevin Waugh, Conservative Member of Parliament for Saskatoon—Grasswood, and Chair of the Conservative Saskatchewan Regional Caucus, and Warren Steinley, Conservative Member of Parliament for Regina-Lewvan and Shadow Minister for Prairie Economic Development.

“This is the second time Conservatives have asked the Liberal government to remove a longstanding deal imposed by a former federal government to give CP Rail a permanent tax exemption in Saskatchewan."

This section of the constitution outlines tax exemptions for CP Rail to the province of Saskatchewan in exchange for building a cross-country railway system. The heart of the matter goes back to a deal the federal government struck with CP Rail in 1880 in order to build the cross-country railway. 

The issue came before the Saskatchewan legislative assembly back in November and the proposed amendment was passed by all members of the legislature, moving it to the federal government level. One Saskatchewan politician even shared this note.

“This motion has led to unanimous support of every politician in Saskatchewan, every provincial MLA from both sides of the aisle and every federal MP from Saskatchewan. I am asking this House to show that same solidarity and respect Saskatchewan rights,” said Moose Jaw – Lake Centre – Lanigan MP Fraser Tolmie. 

The amendment now goes to the Senate, where the Governor-General can proclaim it to become law. 

“The voice of Saskatchewan could no longer be ignored. The debate we brought forward resulted in the successful commitment by the Government of Canada to remove this unprecedented tax exemption that was granted before Saskatchewan became a part of Canada and has allowed a big profitable company to pass the tax burden to Saskatchewan citizens for more than a century," stated the pair of Waugh and Steinley.

The amendment to the constitution was sparked after Canadian Pacific filed a lawsuit against the Province of Saskatchewan for $341 million for taxes paid since 2002. 

CP Rail argues that under the 1880 agreement they are exempt from paying certain taxes to the province. The province is countering that the agreement ended in 1966 when then CP’s president had a handshake deal with the federal government to drop the tax exemption in exchange for regulatory changes. 

“We look forward to supporting efforts that ensure this commitment is carried out by the Trudeau Liberal government, and we will ensure the voices of the people of Saskatchewan are respected," the written statement closed, “Conservatives will always be on Saskatchewan’s side, and we will be a voice for all Canadians.”

Removing section 24 of the Saskatchewan Act would make it clear in the future that the tax exemption is no longer in effect. 

The lawsuit is still before the courts.