Ottawa agrees to refund City of Laval $1.1 million claimed by CRA
The City of Laval won’t have to pay $1.1 million to former mayor Gilles Vaillancourt for unpaid taxes owed to the Canada Revenue Agency (CRA).
Federal Finance Minister François-Philippe Champagne announced last week that he was authorizing a voluntary, non-binding payment of $1.1 million to the CRA to cover the bill.
The amount is being disbursed to settle an obligation the CRA claimed the City of Laval had to the federal tax collection agency. Vaillancourt, who served as mayor of Laval from 1989 to 2012, was arrested in 2013 by UPAC, Quebec’s anti-corruption police.
Three years later, he pleaded guilty to conspiracy, breach of trust and fraud after $7 million believed to have been stolen by him was finally located in a Swiss bank account. But after Vaillancourt returned the money to the city, Laval was left on the hook for $1.1 million in taxes still owed to the CRA.
Minister Champagne’s statement
In a statement texted to The Laval News last Thursday by John Fragos, press secretary to Champagne, Fragos said, “Minister Champagne connected with the mayor of Laval earlier today to confirm that, in the interest of fairness and in keeping with the Quebec government’s own handling of the tax matter at the time, he will authorize an ex gratia payment of $1.1 million to rectify this wholly unfair situation and bring fairness to the city of Laval and its residents.
“This payment will be made in recognition of a payment that the City of Laval is required to make to the Canada Revenue Agency,” he added.
Mayor Boyer jubilant
For his part, Boyer said in a statement, “A major victory for Laval residents in this matter! I received confirmation today that an agreement has been reached with the federal government, at no cost to Laval taxpayers.
“Laval residents have already paid a heavy price for the criminal acts committed by Mr. Vaillancourt, and we can now finally turn the page on this unjust affair,” he continued. “I would like to thank Minister François-Philippe Champagne for his collaboration on this matter and his commitment to finding a solution in the best interests of our community.”
Boyer had been contesting a request from the CRA for the City of Laval to pay the taxes owed on the amounts which had been refunded by Vaillancourt to the municipality.
Closure sought by CRA
Boyer first brought up the issue in March. During that month’s city council meeting, he said in his opening remarks that a resolution would be passed asking Champagne to intervene in the City of Laval’s favor.
Although Vaillancourt returned more than $7 million to the city, the CRA reportedly wanted to close the file by getting someone to make the final payment.
According to a Radio-Canada report, Vaillancourt’s lawyers were arguing that the City of Laval should be held responsible for the unpaid taxes since the municipality got what it wanted when it received the sum Vaillancourt had reimbursed.
In a relatively rare instance of solidarity between the mayor and opposition forces on city council, Action Laval opposition city councillor David De Cotis (Saint-Bruno) tabled a motion in March supporting the administration’s position on the unpaid taxes.
Former mayor suing the city
Following these new developments, there was no word late last week as to whether Vaillancourt still intends to proceed with a lawsuit against the City of Laval for reasons that were never entirely clear.
According to La Presse, which had obtained a heavily-redacted copy of a notice of legal action filed by lawyers for Vaillancourt, only 13 of nearly 40 paragraphs in the document were legible, making it difficult to understand the grievances of Laval’s former mayor.
Even the amount of the damages claimed was redacted beyond legibility. However, a handwritten note on the back mentioned a claim for $3,517,000, although the reasons for this massive redaction, unusual in civil matters, were also not clear.
Vaillancourt’s lawyers
In the matter of the unpaid tax bill, Vaillancourt’s lawyers had argued that the City of Laval should be held responsible for the unpaid taxes.
In sections of his claim that weren’t redacted, Vaillancourt’s lawyers explained that he reached agreements in 2016 with Revenu Québec, the Director of Criminal and Penal Prosecutions and the City of Laval.
His lawyers said he was asking the court to order the City of Laval to pay four separate amounts – which were all redacted in the document – including reimbursement of his extrajudicial fees.
