Province admits 'some unfairness' in seizure of historic Winnipeg hotel over 4 decades ago

After fighting for recognition for over four decades, John Perrin finally got an acknowledgement that a historic downtown Winnipeg hotel had been wrongly seized from his family due to an improper tax assessment, but he's still seeking accountability.

Perrin's family company bought the Fort Garry Hotel from CN Rail for $100,000 in 1979, but they were baffled when their first annual property tax bill came to $280,000 an amount later found to be 9,700 per cent higher than it should have been.

In a Jan. 31 letter to John Perrin, Manitoba Justice Minister Kelvin Goertzen said an independent review was conducted and found the family company was "caught in a set of circumstances that ultimately resulted in some unfairness."

"However, it also concluded that the province did not commit a wrong or create the unfairness," wrote Goertzen, since the City of Winnipeg was responsible for conducting tax assessments andenforcement, and had wrongly interpreted provincial legislation that dealt with appeals.

Two unsuccessful attempts to appeal the initial property tax assessment were made in 1981 and 1982, but Perrin says the city froze individual assessment appeals after incorrectly interpreting Bill 100, provincial legislation meant to freeze the level of Manitoba property values.

A group of downtown Winnipeg business owners sued the city over the appeals restriction, but the provincial court upheld the city's conclusion. The debate later moved to the Supreme Court of Canada, which ruled in 1983 that Winnipeg taxpayers could appeal property assessments.

But the decision came too late, as the Perrin family owed just over a million dollars in taxes, penalties and interest in 1983, andthe city put the building up for sale for that amount after seizing it in 1987. In that year, the building and the land beneath itwere purchased by Raymond Malenfant, a Quebec hotelier, according to the hotel's website.

43-year fight

Perrinsays the city took advantage of the province's failure in its assessment and appeal system. He has contacted the provincial ombudsman as well as multiple mayors and premiersover the past two decades, saying his family is owed an apology and compensation.

"We got our first tax bill in 1980, when I was 30 years old, and now I'm 73," said Perrin.

"There hasn't been a year go by that I haven't been taking action to raise this with the government, and there probably hasn't been a day in those 43 years that I haven't thought about it."

While it could not comment on the provincial review, the city told CBC News on Thursday "it is worth noting that changes in provincial legislation at the time" led to "a variety of legal issues being raised, which were ultimately resolved by the courts."

WATCH | 'My tax assessment is10 times higher than it should be':

FROM THE ARCHIVES: City applies for ownership of historic hotel after tax dispute

1 year ago

Duration 4:40

In 1987, the City of Winnipeg applied for the title of the Fort Garry Hotel, after the Perrin family failed to pay about $2.5 million in taxes.

In 1984, the family was able to appeal their initial property tax assessment to the provincial municipal board, which Perrin said led to an erroneous ruling that market value was not relevant to assessments.

Although the province later amended Bill 100 to allow assessment appeals, Perrin said it did not allow for retroactive ones, meaning hisfamily was out of luck.

In a separate 1987 case, Perrin said the Court of Appeal found that "market value was the only test for assessments in Winnipeg," which allowed his family to submit another appeal.

"So in other words, the decision that the municipal board made in our case was wrong that rubbed salt in the wounds, and was the second part of the denial of justice that occurred here."

'My reputation was trashed'

Perrin said his family finally received vindication in 1991, after the municipal board ruled the city had over-assessed taxes owed on the hotel between 1980 to 1983, and taxes owed for that three-year period should have been $95,000 rather than around a million dollars.

He wrote a letter in response to Goertzen earlier this year, which included longtime tax lawyer Michael Mercury's conclusion that the province "committed wrongs and created unfairness through failures to act and through enacting confusing legislation."

A spokesperson for Manitoba Justice told CBC News that the department has communicated directly to Perrin about the issue and had nothing further to add.

Perrin said the ordeal has been extremely difficult for his family over the decades.

"When we finally lost the hotel in 1987 I was 37 years old, and basically my reputation was trashed, because at that point it was our word versus everybody else," he said.

While he might request further meetings with the mayor and premier in light of Goertzen's letter, Perrin said he's hoping they reach out to him first.The decades-long debacle has not changed his view of the historic hotel, he said.

"It carries with it some hurt, but I can certainly separate the two andenjoy the building for everything that it is, because it's just such a wonderful asset for the city of Winnipeg."