Mr. Harris says his ultimate hope is that a judge will now order the federal government to go back and reassess the freebie handed to a family that is widely believed to be the Bronfmans.

Toronto, September 8, 2001

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http://www.nationalpost.com/home/story.html?f=/stories/20010924/703414.html

Bronfmans' tax break faces trial

An activist's cause: Wealthy family spared payment of many millions

Janice Tibbetts
Southam News

OTTAWA - George Harris will make Canadian legal history today when his lawyers rise in a small Winnipeg courtroom to rally against a tax break worth hundreds of millions of dollars given to a rich Canadian family.

After years of fighting for the unprecedented right to challenge favourable tax treatment handed to another individual, Mr. Harris says his ultimate hope is that a judge will now order the federal government to go back and reassess the ''freebie'' handed to a family that is widely believed to be the Bronfmans.

''If you owe something, you should pay it,'' the 56-year-old Winnipeg social activist says matter-of-factly. ''This is about fairness and integrity of the tax system.''

The soft-spoken AIDS support worker says he intends to sit through all two weeks of the Federal Court trial, which will pit lawyers for the Winnipeg-based Public Interest Law Centre against the Canada Customs and Revenue Agency.

Ottawa lawyer Peter Kremer will argue for the federal government that the tax ruling was made in good faith.

''Our position is that Revenue Canada officials deal with tax rulings that are difficult and sometimes they involve a lot of money but they interpret the law as they understand it to be,'' said Kremer. ''If it has positive tax consequences to the person making the request, then that's the way the law was intended to be.''

The case had been held up in preliminary proceedings for five years while the government tried to have the matter thrown out of court, arguing that allowing a private citizen to challenge the tax treatment given to another individual would jeopardize the tax system.

But the Federal Court, in two assertive rulings, concluded that Mr. Harris had every right to monitor the tax system.

The case was prompted by a controversial tax ruling in 1991 that, federal sources confirmed in newspaper reports five years later, allowed the Bronfmans to move more than $2-billion in Seagram Company stock, held in two family trusts, to the United States without paying capital gains tax. The loophole was closed this year.

The tax break sparked a severe rebuke from then auditor general Denis Desautels. He noted that the Revenue and Finance departments initially opposed granting the family the tax break, but the decision was overturned by more senior officials in meetings for which no minutes were kept.

Edgar Bronfman (right) is stated in the Jewish press to have been one of the major financial contributors to Deborah Lipstadt, paying the millions of dollars that were used to finance her neutral expert witnesses to testify as they did in Mr Irving's libel action against her.

 

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