Billionaires' companies benefit from Manitoba education property tax rebate

The government of Manitoba sent large education tax rebate cheques to companies belonging to billionaireson a list of some of the world's richest people,a CBC News analysis has found.

That includes Charles Koch, who can thank the province of Manitoba for at least $80,414 last year the rebate sent to Koch Fertilizer Canada'splant in the southwestern Manitoba city of Brandon.

Koch is currently the 21st-richest person in the world, andsaw his $38.2-billion fortune increase to $60 billion in the last two years, according to theForbes real-timebillionaire list.

"Property tax rebates to the wealthiest owners is an incredibly inequitable use of public funds, particularly when there's so many other pressing needs," said Alex Hemingway ofthe Canadian Centre for Policy Alternatives.

Hemingway, a senior economist with the think tank,says billionaires and large corporations have done "extremely well" during the pandemic, a time when many workers were out of jobs. Thecentre's research suggestsbillionaire wealth in Canada increased by $78 billion in the first year of the pandemic.

When the Progressive Conservative government announced the rebate of a percentage of the tax collected to fund K-12 education in 2021, it said the intent was to put money back into the pockets of families struggling to make ends meet, and help seniors and small businesses.

$350M in rebates in 2022

The rebates totalled $246.5 million in 2021, according to the province's latest budget document, and$350 million this year, at a time when theprovince is running a deficit.

Under the plan, the rebate for homeowners in 2022 increased to 37.5 per cent, upfrom 25 per cent in 2021.Commercial properties get 10 per cent back on their education taxes. There is no limit on the size of the rebate.

That's led to rebates for some companies owned by Canadian billionaires, along with companies likeKoch Fertilizer Canada.

Canadian cheese magnate Emanuele (Lino) Saputo and his family are currently worth $4.8 billion, up from $3.8 billion in 2020, according to Forbes. He and a family member own 42 per cent of Saputo Inc.'s common shares, according to 2022 TSX filings.

Saputo Dairy Products got a $12,813rebate for its plant in Brandon in 2021.

Neither Koch Fertilizer Canada nor Saputo responded to a request for comment.

In Winnipeg, True North Square gota property tax rebate cheque for $259,709 in 2021, according to records obtained through an access-to-information request, making it the third-highest amount issued in the city.

True North Square is co-owned by David Thomson, who is listed,along with his family, as the 26th-richest in the world by Forbes, whichsays their fortune increased from $31.6 billion to $49.2 billion between 2020 and 2022.

The company says it had to use the rebate to pay for the development of the True North plaza, which received $11.95 million in tax increment financingfrom the provincein 2018.

TIF isaform of government subsidy intended tostimulate development.It allows owners to avoid paying increased taxes up to a set amount when they build a project that is worth significantly more than the previous structure on the site.

"One hundred per cent of the rebate was used to fund provincial TIF[tax-increment financing] obligations" and "no amounts flowed through to the TN Square ownership group," wrote Gavin Johnstone, vice-president of True North Real Estate Development Ltd., who spoke on behalf of Thomson's real estate arm, Osmington.

"The province reduces the annual TIF grant paymentby the value of the education property tax rebate applied to the project property. This reduction is made to avoid double payment to a property owner," wrote a spokesperson for the department of finance in an emailed statement Monday.

Commercial tenants not seeing trickle down: CFIB

Members of the Canadian Federation of Independent Business, which represents small businesses, are "overwhelmingly" happy with the rebate, saysprovincial director for Manitoba Kathleen Cook,because mostmembers are also homeowners.

But there is some dissatisfaction among commercial tenants who have not received a portion of their landlords' rebate, she said.

"They lease their business premises and presumably they're paying property taxes through their lease costs, but they're not necessarily seeing the property tax rebate trickling down to them."

The business federationrecently sent a letter to Finance Minister Cameron Friesen asking if there is a policy or recourse for commercial tenants who are not receiving their portion of the property tax rebate.

This comes after Scott Fielding,the province's former finance minister, said earlier this year thatcommercial tenants do get a share of the rebate.

"Under the terms of commercial leases, the tenants pay all of the property taxes, andrebates must go to provide it to the tenants,"Fielding said during question period at the legislature on May 17,referencing a letter to the editorthat had been published in the Winnipeg Free Press.

Friesen was not available for an interview for this story and his press secretary, Eric Bench, did not provide a direct response when asked about CFIB members' concerns.

The rebate is intended to "make life more affordable for all Manitobans" who are "feeling the squeeze from rising costs,"Friesen's press secretary wrote in an email.

Bench did not respond to a question about how the money spent on education property tax rebates will be replaced in the province's coffers, but he said the government is taking a "careful and disciplined approach to managing expenditures."

The $548-million deficit forecast for 2022-23 "is not attributable to the rebate or any other specific decision or program," wrote Bench.

The CCPA's Hemingway, though, says this is a continuation of a "long-running" trend towardextreme wealth inequality in Canada.

"We're talking about pouring fuel on the fire of this type of inequality by giving public rebates and public dollars to the wealthiest few," he said. "That really doesn't make sense."