Hon. Paula Simons: Honourable senators, I want to start today with some history. In 1880, the Government of Canada signed a contract with the Canadian Pacific Railway, or CPR, granting to the railway the right, in perpetuity, to be exempt from paying taxes along its proposed route through the Canadian Prairies.

In 1880, let’s remember, the provinces of Saskatchewan and Alberta did not exist. It had only been in 1869, just 11 years before, that the Hudson’s Bay Company sold the territory it called Rupert’s Land to the government of the new nation of Canada for the fire sale price of £300,000 or $1.5 million — although you could argue that the Hudson’s Bay Company got a pretty good deal since the land in question didn’t actually belong to them. The land had never been conquered by the British Crown. It was Hudson’s Bay Company trading territory, but it had been, until that moment, the territory of the First Nations and the Métis Nation, who called it home.

Eventually there would be treaties that covered the land where the CPR would lay its rails, but those treaties weren’t signed until years after the land sale: Treaty 4 in 1874; Treaty 6 in 1876; and Treaty 7, not signed until 1877, just three years before the government signed its deal with the CPR.

It was an act of no small colonial hubris for the government of Sir John A. Macdonald to award Canadian Pacific Railway the eternal freedom from paying taxes on land it had been given by the Crown for its right-of-ways. Yes, that’s right — the CPR got the land for free and an everlasting tax holiday, too.

That same colonial spirit was strongly at play when Saskatchewan and Alberta finally entered Confederation in 1905, not as full-fledged provinces with the same rights as the others, but with slightly second-class status when it came to the governance of their own lands and natural resources. That same central Canadian colonial mindset helps to explain why the CPR tax exemption was written right into The Alberta Act and The Saskatchewan Act, and thus into the British North America Act itself.

I mean, it is absurd, when you think about it. We actually wrote a corporate subsidy — a perpetual tax holiday — for one private company right into our Constitution, our nation’s supreme piece of legislation. And we left it right there in 1982 when we repatriated our Constitution, making the taxpayers of Alberta, Saskatchewan and Manitoba, too, perpetual second-class citizens, perpetually on the hook, committed to subsidizing the cost of Sir John A. Macdonald’s crony capitalism forever and ever, amen.

Perhaps the reason this issue didn’t come up 40 years ago when we brought the Constitution home is because the CPR actually started paying its taxes on the Prairies voluntarily in 1966. Perhaps that’s why no one dealt with this oddball anachronism in 1982 when we opened up the Constitution for review and restructure.

Indeed, this whole matter might have been consigned to the history books if the CPR hadn’t sued the three Prairie provinces in 2008, demanding the return of the taxes they had already voluntarily paid, or, to be more precise, for six years of back taxes, the most they could claim under the statute of limitations.

Their logic was based on a 2007 Supreme Court of Canada decision called Kingstreet Investments Ltd. v. New Brunswick (Finance). In that case, the Supreme Court held that restitution should be generally available for the recovery of monies collected under legislation that is subsequently declared to be ultra vires because it would be fundamentally wrong for a government to retain taxes it collected under a regime that was beyond its legal powers. To use a non-Latin phrase, CPR’s interpretation of Kingstreet stirred up a hornet’s nest.

Today, we are specifically discussing a motion to end Canadian Pacific Railway’s tax-free status in Saskatchewan, but let’s note that the CPR sued Alberta, too, filing its statement of claim against my province on August 13, 2008. That was back when Ed Stelmach was Alberta’s premier.

Though the case has yet to go to trial, or even to proceed to examinations for discovery, that lawsuit has stayed active throughout the premierships of Ed Stelmach, Alison Redford, Jim Prentice, Dave Hancock, Rachel Notley and Jason Kenney. Indeed, the CPR filed an updated statement of claim against Alberta in December 2020, demanding that it be exempt from paying carbon and fuel taxes, too.

So I’m speaking today very much as an Alberta senator and an Alberta taxpayer with a keen interest in ensuring that other Alberta taxpayers are getting their own fair deal from Confederation.

With that framing in mind, let me make three points.

First, despite the wording of The Alberta Act and The Saskatchewan Act, and despite the incorporation of this never‑ending corporate subsidy into the Constitution, the deal is not written in stone, and legal authorities seem to agree that the Parliament of Canada has the right and power to amend it. Parliament, after all, is sovereign, and no parliament, one could argue, has the power to bind a future parliament in this perpetual way, because no one parliament — even one led by Sir John A. Macdonald — is superior to another.

This isn’t a fairy tale from The One Thousand and One Nights or the Brothers Grimm, where a kingdom is cursed because its king signed some kind of blood contract with a jinni or Rumpelstiltskin. We have the power to break this spell.

This was a business deal inked in 1880, in a completely different world — one where Saskatchewan and Alberta didn’t even exist and where no one imagined that CP would be changing its name to Canadian Pacific Kansas City Limited or be running trains all the way to Mexico. How logical is it for such an agreement to be binding 142 years later?

Second, there is, at the same time, a question of procedural fairness and what you might call natural justice. CP and the Government of Saskatchewan have been locked in an active legal dispute over this issue since 2008. For the Government of Saskatchewan and the Parliament of Canada to short-circuit that legal process by changing the rules so radically in the middle of the game isn’t exactly sporting. To use an 1880 colonial idiom, it is “hardly cricket.”

Now, maybe you don’t feel particularly badly for CP. After all, they opened this can of worms when they sued back in 2008. They might have anticipated that Saskatchewan, rather than pay back millions in taxes, might use this nuclear option. Also, given that CP reported $8 billion in revenues for 2021, maybe you’re not feeling deeply sympathetic.

But I feel uneasy at the thought of amending the Constitution retroactively, as this motion proposes, backdating this change to 1966. The Constitution is the moral code and the DNA for our country. It has to be treated with respect and with the understanding that our actions have long echoes. For a government to reverse a constitutional entitlement in this ex post facto way sets a problematic precedent. What other constitutional rights or entitlements might a future government attempt to antedate in this fashion?

In its 1988 ruling in Ford v. Quebec, the Supreme Court of Canada held that the Constitution’s “notwithstanding” clause could not be applied retroactively but only as an act of prospective derogation. I am no expert in constitutional law, although many here are, but from a common sense perspective, I can’t help but wonder if a parallel philosophical argument for prospective derogation might not apply here also. I am happy to argue that we should change this deal going forward for the benefit of Saskatchewan’s future. I am considerably less comfortable with a motion that seeks to time travel some 56 years into the past, not just to rewrite the Constitution but to rewrite history. It may be valid, but I’m not sure it’s good public policy.

Here is my third concern: This is a stand-alone deal for Saskatchewan, a constitutional carve-out for one province, but Saskatchewan is flanked by Alberta and Manitoba, two provinces that share the same CP conundrum. Does it make sense to amend the Constitution for the benefit of only one province when two other provinces are in the same boat — or a rail car? There’s an old expression, “That’s no way to run a railroad.” I can’t help but feel that adage applies here.

Amending the Constitution in this patchwork, piecemeal way leaves us with an uneven and uneasy Confederation. As an Albertan, I’m upset that my own province has been left at the station, as it were, shunted to the side. This is not fair to Albertans, and it’s an imbalance that cannot be allowed to stand.

I have attempted to reach out to the Alberta government to discuss this, and I’d be very willing to work with the province to see what can be done to address this imbalance. That might well include volunteering to move a motion in the Senate to ensure that Albertans get their just deserts.

In the meantime, I’m concerned that by doing these amendments bit by bit, we’re missing a chance for a more coherent examination of these constitutional irregularities. I fear, too, that we’re forfeiting the chance to address the role and the rights of Indigenous peoples through whose traditional lands in Alberta the CP main line runs, including the five nations of Treaty 7: the Siksika, the Kainai, the Piikani, the Stoney-Nakoda and the Tsust’ina.

Thank you for giving me, as an Alberta senator, this opportunity to speak up for the rights of all my fellow Albertans. It is long past time to correct a legal anachronism that denies the three Prairie provinces their constitutional right to levy and collect taxes on their own territories. We can’t be a modern Confederation while Alberta, Saskatchewan and Manitoba are still treated like second-class colonies. I just wish we were tackling this problem in a somewhat different way.

Thank you, hiy hiy.