MP, fishermen outraged: Tax battle over licence buyback continues

By Aaron Beswick

FOR THE SOU’WESTER

Ottawa bureaucrats have outraged nearly 2,000 retired Newfoundland and Labrador fishermen by comparing a $30,000 tax clawback to a parking ticket.

The result could be a class action lawsuit worth tens of millions of dollars.

The insult came on June 25 when Bonavista-Gander-Grand Falls-Windsor MP Scott Simms met with staff with Revenue Minister Gordon O’Connor and senior bureaucrats handling the Atlantic Groundfish Licence Retirement Program file.

The meeting was to discuss the Canada Revenue Agency’s (CRA) tax clawback of some $30,000 each from fishermen who sold out their right to return to the water to Ottawa in 1999. On average the fishermen had been paid $60,000 for their licences and $60,000 to never fish commercially again.

A year after the buyout, the CRA had the Department of Fisheries and Oceans (DFO) send a letter telling fishermen 100 per cent of the money they received was a taxable capital gain. CRA lawyer Ronald Cole admitted in court in 2007 that only 25 per cent had actually been a taxable gain.

Simms requested the meeting to get that money back.

“This is what I was told: ‘Let’s say Mr. Simms that you got a parking ticket and I got a parking ticket. You decide to pay the fine; I decide to contest it. When I go to contest it, the police officer who gave me the ticket doesn’t show up in court and I get off with it. Does that mean you have to get off with it too?’ That’s exactly what was said to me,” a disgusted Simms told Transcontinental Media.

“I was dumbfounded – all I could think to myself was how does a $25 parking ticket equate with the life savings of 2,000 people?”

St. John’s lawyer Eli Baker is representing more than 800 of the affected fishermen and he wants his day in court.

“In November 2007, they said in open court that of payments made in the 1999 groundfish licensing program, only 25 per cent were taxable capital gain. At same time they’re telling us the advice they gave fishermen, back in 2000, that 100 per cent was taxable gain, is correct,” said Baker. “They’re lying to me or they’re lying to the judge and no right-minded person lies to a judge.”

Baker expects the CRA to reject the 820 appeals his office filed with the tax agency because they aren’t being heard by an independent body.

Their options are becoming limited.

“We’re currently exploring a class action lawsuit in federal court for the value of the money due back plus interest. It could run to tens of millions of dollars.”

(Aaron Beswick is a journalist with Transcontinental Media’s Northern Pen newspaper, which is a contributor to the Sou’Wester.)