Manitoba

Manitoba premier comes under fire over alleged failure to pay luxury tax on Costa Rican vacation home

Manitoba Premier Brian Pallister faced questions in the legislature Wednesday about allegations he failed to pay a luxury tax on his Costa Rican vacation home.

Holding company used to purchase home included in list of companies

Premier Brian Pallister said he was 'surprised' and 'disappointed' to learn that he might owe a luxury tax on his Costa Rican vacation home. (Warren Kay/CBC)

Manitoba Premier Brian Pallister faced questions in the legislature Wednesday about allegations he failed to pay a luxury tax on his Costa Rican vacation home.

Pallister and his wife own the home — which sits on several acres of land near Tamarindo, Costa Rica — through a holding company.

CBC News has reviewed a list of companies that — based on the value of their construction permits  may owe on the tax but had not yet filed to pay it, which was published on a Costa Rican website that provides legal information for foreign investors. The site says the list was current as of 2012. The premier's holding company was named on that list.

The Costa Rican luxury tax is applied to homes that exceed a certain value.

Opposition NDP Leader Wab Kinew raised the issue repeatedly in the legislature during question period on Wednesday.
Pallister not sure if Costa Rica tax applies to his property, or why he wasn't notified if they were in arrears. 2:01

"The company appears on a list of a luxury home tax debtors, those deemed by the Costa Rican revenue department to be currently delinquent of the filing and payment of the tax," Kinew said.

Pallister said he was "surprised" and "disappointed" to learn that he might owe taxes on the home, insisting he has always paid what he owes.

"The story didn't jive with the information we've been given by the people down there, by the people we trust to give us advice, so I was disappointed in that," he said in reference to a story published Wednesday in the Winnipeg Free Press. "But we'll investigate further," Pallister said in a scrum after question period.

Pallister said his wife, Esther, handles their family's finances, including their Costa Rican property, and that she is currently looking into the issue. Although he said the information he received led him to believe the tax didn't apply to his property, he said he doesn't blame his lawyers or real estate agent.

"I think in hindsight we probably should have dug deeper on the issue and I regret we didn't," he said.

Kinew continued to question Pallister on the issue during a budget estimates meeting of the executive council following question period. When Kinew asked when the premier was made aware of the issue of the tax, Pallister replied "yesterday."

Kinew then asked what new information Pallister had uncovered since that time.

"I think that the questions the member is asking at this point, in my humble estimation, venture very far outside of my responsibilities as premier of Manitoba," Pallister said.

"If the member would like to get into issues of judgment, I would be very ready to discuss the issues around female staffers, former MLAs and cabinet ministers of the NDP who have made allegations against a former MLA and finance minister of this province."

Pallister was referring to allegations of sexual harassment made against former Manitoba finance minister Stan Struthers.

Pallister has taken heat in the past for spending many months in Costa Rica while leader of the Opposition, his vacation time there while he's been premier, and how he communicates with staff while away.

He said the assessment for the luxury tax is a voluntary system in Costa Rica and he bears responsibility.

Corrections

  • An earlier version of this story said CBC News had reviewed a 2009 list of companies that had allegedly not paid the Costa Rica luxury tax, which was published on a Costa Rican website that provides legal information for foreign investors. In fact, the list CBC reviewed included companies that — based on the value of their construction permits — may owe on the tax but had not yet filed to pay it. The website claimed the list was current as of 2012. In addition, an earlier version of this story said Brian Pallister and his wife own a 7,000-square-foot home. In fact, Brian Pallister says the home is 3,500 square feet.
    Jun 19, 2018 7:48 PM CT
  • An earlier version of this story said CBC News had reviewed a list of companies, posted by the Costa Rican revenue department, that had not paid the tax and the premier's holding company was on that list. In fact, the list CBC reviewed was published on a Costa Rican website that provides legal information for foreign investors.
    Apr 05, 2018 4:18 PM CT

With files from Sean Kavanagh