City sues Hydro over tax dispute

The City of Winnipeg suing Manitoba Hydro, claiming the utility owes it millions of dollars of unpaid taxes.

In court documents filed on Feb. 25, the cityclaims Hydro failed to paymoney it was supposed to be collecting from ratepayers' hydro bills between 1999 and 2009.

The city is asking the court to confirm the debt and order Hydro to pay up.

It's a relatively high-stakes battle for the city. Its balanced budget, tabled last month, assumesit willreceive$10.18 million as a result of winning its dispute with Hydro.

Recent reports indicated that finance officials from the two sides were talking about the back-tax issue, but the filing of the lawsuit indicates no agreement was made.

In the documents, the city argues that under sections of the City of Winnipeg Charter and other bylaws, Hydro has the responsibility and duty to collect a levy on behalf of the city from personal and commercial gas and electricity users.

Under the agreement, the city says, residential customers should be paying a 2.5 per cent levy on their monthly bill, and commercial customers five per cent.

But Hydro never collected the money, or collected it and didn't pass it on the city, the lawsuit alleges.

"[Hydro] knew or ought to have known that the city was relying on them to collect and remit the taxes properly pursuant to the statutes," the city said in its statement of claim.

The allegations made in the lawsuit have not been proven and Manitoba Hydro has not yet filed a statement of defence.