Pending MTS sale brings to light decades-old 'tax break'

The pending sale of MTS provides a narrowwindow of opportunity for the City of Winnipeg to re-examine a de facto tax break enjoyed by the telecommunications company.

But neither Winnipeg Mayor Brian Bowman nor Manitoba Premier Brian Pallisterare seriously considering any changes to a decades-old arrangement, which sees MTS pay less than $10,000 a year in property taxes for its distribution system.

In 1971, the city setthe assessed value of the land used by MTS to string along all of its telephone wires and cables at $1.2 million.That value was enshrinedin the City of Winnipeg Charter, the legal document that established the modern Winnipeg when it amalgamated with 13 of its suburbs.

That value has not changed in the ensuing 45 years becausechanges to the charter must be approved by the province. As a result,MTS will onlypay$9,957 worth of property taxesthisyearfor itstelephone wires and cables.

Bowman, however, said he is not about to lobby for changes to the city charter to collect any additionalproperty-tax revenue, evenas Montreal's BCE ispoised to purchase MTS for $3.9 billion.

"I know that previous mayors, previous provincial governments have had discussions about it to no success. It isn't something I would certainly rule out [but]it's not the biggest priority right now," Bowman said on Friday at city hall.

"We'll see where the discussions go with the province. They would have to make a charter change."

The city cannot quantifyhow much property-tax revenue it has failed to collectover the decades as a result of the frozen assessment for MTS'distribution system. This is partlybecause city assessors have never tried to attach a value to the wires and cables

"The city can't quantify lost revenue because there has never been an actual assessment of the value of MTS'distribution system," said mayoral spokesmanJonathanHildebrandviatext message.

"How do you assess the valueof land in which MTS' telephonecablesarerun? It's not as easy andstraightforwardas assessing the value ofresidentialor commercial property."

Bowman notedMTS does pay property taxes for all of its buildings and other facilities. The company would not quantify that figure, either, but said it amounts to millions every year.

"MTS pays real estate taxes and business taxes the same as other businesses," spokesman Jeremy Sawatzky said in a statement.

"It is important to note that most of MTS' wires in Winnipeg are often co-located (along with Shaw) on Manitoba Hydro poles, for which Manitoba Hydro receives material fees from MTS every year."

Bowman said the city is more concerned with lobbying the province for a better overall funding deal. The Pallister government, meanwhile, is not considering any changes to the city charter that would affect MTS' tax assessment.

"We are not looking at making any changes to this legislation at this time," said Olivia Billson, Pallister's press secretary, in an email statement.

The city originally set the value of MTS' wires and cables at $900,000 in 1918. That figure rose to $1.2 million in 1971 and has not changed since.