Forty years to find out Fort Garry’s owners got ‘royally screwed’

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This article was published 17/08/2023 (765 days ago), so information in it may no longer be current.

FOR the first time since the historic Fort Garry Hotel was seized and sold by the City of Winnipeg in a tax sale almost four decades ago, a Manitoba cabinet minister has admitted the former owner was wronged — but by the city, not the province.

In a letter, Justice Minister Kelvin Goertzen told John Perrin — whose father bought the century-old hotel for $100,000 in 1979, but lost it in 1987 in the tax sale — that he had ordered an independent review to look into the situation.

“The review concluded that your family’s company was caught in a set of circumstances that ultimately resulted in some unfairness,” Goertzen wrote.

“However, it also concluded that the province did not commit a wrong, or create the unfairness, that led to the loss of the hotel. In reaching this conclusion, the review noted that the City of Winnipeg did the assessments, did the enforcement and incorrectly interpreted the provincial legislation as it related to appeals.”

Goertzen admitted it was not the conclusion the Perrin family had hoped to get.

“In reading media accounts and hearing from you personally, it is impossible not to be both moved by the situation and the years and toll it has taken,” he said.

“I only hope you know that this was not looked at frivolously or summarily, but undertaken thoughtfully and independently knowing the impact it has had on the Perrin family.”

A spokesman for the City of Winnipeg said it will respond, but needed more time.

Perrin said he’s not only upset because the province won’t say who did the review or give him a copy of the report, but also because he was never contacted by anyone to get his side of the story.

“We have no idea what aspects of our story were considered by the investigator,” he said.

“We were not informed by the province of the identity of the investigator, but suggest the investigator is not truly independent … (we) believe fairness requires that we should have been given the report and an opportunity to respond to it.”

Perrin said he responded to Goertzen’s letter, pointing out all of the ways the province created the unfairness which resulted in the loss of the hotel, because the provincial assessor didn’t intervene and say Bill 100 wasn’t intended to prevent Winnipeg taxpayers from appealing assessments.

But Perrin said all he received in return was a single-page letter from Denis Guenette, director of Manitoba Justice’s legal services branch, saying there was nothing further to add to the minister’s response because “as a matter of law, the province did not commit a wrong or create unfairness.”

Perrin did say there was one positive outcome.

“(The minister’s) letter constitutes the first time in 22 years that the province has acknowledged there was ‘unfairness’ in our situation.”

The hotel was owned by CN Rail, which paid an annual grant in lieu of taxes to the city, until the Perrin family bought it.

That’s when the problems began.

When the Perrin family received its first property tax bill for the hotel it was based on an assessment 9,700 per cent higher than it should have been, resulting in a tax bill of $280,000 for a building that cost them $100,000.

When the family moved to appeal the assessment the following year, they were blocked because the province had passed Bill 100, freezing the 1980 assessment for both the 1981 and 1982 tax years.

Manitoba courts agreed with the city, saying the owners couldn’t appeal, but a later decision by the Supreme Court ruled the Perrin family could appeal the assessment. When they did, their tax bills — totalling more than $1 million over three years — dropped to about $95,000.

By then it was too late: the city had seized the hotel and had offloaded it in a tax sale. Perrin has been fighting since then to salvage his family’s reputation and get compensation.

Longtime tax lawyer Michael Mercury, who successfully appealed assessments for downtown building owners on Portage Avenue back in the 1980s — saving them millions of dollars — is blunt about what happened to the Perrin family and about the latest letter from the justice minister.

“He has been royally screwed,” Mercury said. “It’s wrong.

“The wrong (the province) did was you passed legislation so vague you confused the Manitoba courts and the Supreme Court had to settle it. The victim is the Perrin family. It is a disgrace and terrible what happened.

“Yes, (the province) did a wrong.”

A spokesman for Manitoba Justice said in a statement “the justice department has responded directly to Mr. Perrin about these matters and has nothing further to add.”

kevin.rollason@freepress.mb.ca