CBC News has learned Manitoba Premier Brian Pallister received a tax amnesty on money he owed the Costa Rica government, raising questions about why the tax break wasn’t disclosed when he announced he had paid his back taxes on his vacation property.
The previously undisclosed amnesty was brought to light when the country made public a list of companies and people that were included in the amnesty program in 2018.
On that list was the holding company controlled by Pallister — which is the owner of the premier’s vacation property in the sunny locale.
The program forgave upwards of 80 per cent of penalties on the taxes he owed and all the interest, because the money owed was paid during a specific three-month period from late December 2018 to March 2019.
CBC News first approached the premier’s spokesperson with questions about the Costa Rica tax amnesty list and Pallister’s use of the amnesty program at the beginning of January.
After nearly five months, Pallister claims to have no knowledge of the amnesty.
“Any tax relief provided through an amnesty program would presumably have been offered automatically by the Costa Rican government, as the premier did not request to take part in any such program,” Pallister spokesperson Olivia Billson wrote in an April 30 statement.
“Any application of an amnesty program or changes to the amount billed to and paid by the premier has not been conveyed to him.”
Premier being ‘evasive’: Opposition leader
The amnesty program was designed to encourage thousands of Costa Ricans to pay back taxes owed to the government before Oct. 1, 2017.
The Costa Rica government’s list, released in April of 2019, did not disclose how much Pallister owed, only the amount he paid — roughly $4,000 in back taxes.
It is unclear what debts were cleared using the amnesty program, as it could have been used for his luxury tax debt or another unknown federal tax he owed the Costa Rica government.
Pallister’s spokesperson said the premier could not clarify anything further because he was unaware of his participation in the program.
“It’s ridiculously fitting,” NDP Leader Wab Kinew said of the lack of disclosure from the premier.
“So long as the premier is still being evasive and not fully explaining the situation, this issue is going to continue to be a distraction.”
Questions surrounding how much time Pallister spent in Costa Rica have dogged the premier for years, after a 2016 CBC investigation revealed he spent one in five days there while he was leader of the Opposition.
More recently, the controversy has been about whether he qualified and paid a “luxury tax” on his vacation home in the Central American country.
Since 2009, the Costa Rica government has taxed homes with a construction value of 100 million colones — about $230,000 Cdn.
The tax is supposed to be used to pay for low-income housing.
Not paying the tax meant the homeowner would be penalized up to 10 times the tax that had to be paid.
Pallister and his wife purchased the Costa Rica property, which according to design plans has a 3,400-square-foot main bungalow, in 2008.
Pallister says penalties paid on unpaid luxury tax
While Pallister’s large vacation home seemed to fall into the category of “luxury,” a CBC investigation in June of 2018 revealed Pallister had never updated the value of his home — despite a legal requirement to do so every five years.
In an August 2018 interview with The Canadian Press, Pallister said he had travelled back to Costa Rica and updated the value of his home.
He said he paid what he owed — roughly $8,000 in back taxes and penalties — but did not produce any evidence at that time.
In April of 2019 — just after the amnesty program came to a close — he showed The Canadian Press a document that said his holding company was up to date on the payment of its luxury tax.
Pallister said he had instructed his lawyer to pay the luxury taxes in August of 2018, but there was a delay because of a general strike by Costa Rica civil servants.
Paul Thomas, professor emeritus of political studies at the University of Manitoba, said there is nothing wrong with Pallister taking advantage of a legal tax amnesty, but questions why the premier doesn’t just clear up lingering questions on the issue.
“He is doing what any shrewd business person would do,” Thomas said.
“Given that this has become a significant public issue, does he have a duty to inform himself of what is being done in his name?… I would think that as a political precaution he would want to do that.”
Over 14,000 people and companies took part in the program and over $400 million in outstanding debts were cancelled, according to the Costa Rican government.
The list of those participants was made public in April of 2019 when the country’s Constitutional Chamber — a chamber of the supreme court charged with the protection of the fundamental rights of Costa Ricans — ordered the release of the list of those who got amnesty.