The federal government has agreed to pay $1.1 million to settle a Canada Revenue Agency tax bill imposed on a Montreal suburb for funds the city recovered from a corrupt ex-mayor.
A spokesperson for Finance Minister François-Philippe Champagne says he will authorize the payment to the Revenue Department on behalf of Laval, Que., north of Montreal.
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The tax bill stems from the actions of former Laval mayor Gilles Vaillancourt, who pleaded guilty in 2016 to participating in a years-long collusion and corruption scheme surrounding the awarding of public contracts.
He was sentenced to six years in prison and ordered to repay the city more than $8 million, including $7 million that was held in a Swiss bank account.
Laval Mayor Stéphane Boyer formally asked Ottawa in March to intervene so that the city’s residents wouldn’t be stuck paying taxes on money it recovered from Vaillancourt.
Champagne’s press secretary, John Fragos, says the government recognizes that the tax situation was unfair to Laval and its residents, and is acting to rectify it.
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