Bronfman tax case back in federal court

Ottawa was in court on Thursday defending a decision to waive taxes on $2 billion money transfer

The federal government was back in court on Thursday, fending off a legal challenge to its decision to give a huge tax break to a wealthy Canadian family.

The challenge was brought by a Winnipeg man, George Harris, who objected to Revenue Canada's decision to allow the wealthy Bronfman family to transfer a substantial amount of money out of the country tax free.

The federal government tried to convince a federal court to place strict limits on the case before it goes to trial.

When the family transferred $2 billion out of the country, the government waived the exit tax worth $700 million.

Harris wants the family who got the break to pay it back. As a private citizen, he's been fighting for five years to bring the case to trial, so a court will order that taxes be paid.

After various appeals, the trial is now scheduled to start in September.

But the federal government is arguing that the remedy that Harris wants is beyond the power of the court to impose.

"By definition, the federal court has no jurisdiction over the determination of as assessment that's been made by the minister," said Crown spokesman Peter Cramer.

Harris says he's not discouraged by the latest court challenge. "If they're going this far maybe they're really afraid that if this gets to trial there could be some real serious relief granted. So, I was somewhat encouraged by the fact they were going to this extent."

The federal court judge reserved her decision.

Harris's lawyer, Norm Cuddy, says if she rules against Harris, the case will be in a shambles, although theoretically it could still go to trial.