Skip to main content

Jean Chretien goes water-skiing near his cottage in Lac des Piles, Que., in 1993.

RYAN REMIORZ/THE CANADIAN PRESS

Former prime minister Jean Chrétien has put together a complex land swap with the city of Shawinigan that will see him give up 108,000 square metres of land for a 9,000-square-metre plot next to his property on picturesque Lac de Piles.

Mr. Chrétien had long coveted the land to expand his domain, but the protected area was not available through a simple sale. To make it happen, the former prime minister first bought five other nearby lots that were owned, in part, by a member of the billionaire Desmarais family, his son-in-law André.

Mr. Chrétien then agreed to transfer the five lots to the city of Shawinigan in exchange for the single lot that adjoined his own cottage. To facilitate the swap, Mr. Chrétien agreed to forfeit any money from the city of Shawinigan. Instead, he took a charitable tax receipt of $548,000, which could be worth a deduction in the $260,000 range on his income-tax bill.

Story continues below advertisement

However, Mr. Chrétien's large tax receipt – to be used to lower his income tax bill – is based on the premise that the five lots that he purchased in 2010 have since increased 73 per cent in value.

The city of Shawinigan is pleased with the overall deal, which will not cost it a cent.

Mr. Chrétien did not speak directly to the sale, but through a spokesman said other similar swaps have been done in the area.

"The city is happy, Mr. Chrétien is happy, obviously so are the other owners on the lake," said Bruce Hartley, a long-time aide to the former prime minister.

The lot Mr. Chrétien is getting in the deal was long protected by the city, given the proximity to the municipal intake that provides much of the area's drinking water. After Mr. Chrétien became prime minister, the city did allow the RCMP to build a second getaway route and a hut on the land. However, it reclaimed full ownership after Mr. Chrétien left office.

The lot has a municipal assessment of $390,000. However, as part of the transaction, it is being valued at only $212,000, based on an independent assessment that considers the impact of a new clause that prohibits any construction on the land.

The five nearby lots that are being transferred to the city in the deal were acquired for $440,000 by Mr. Chrétien from a private trust called Fiducie Forden two years ago. According to public records, one of the three signatories for the sellers was Mr. Desmarais, who is married to Mr. Chrétien's daughter, France.

Story continues below advertisement

The five lots, which total 108,000 square metres, have been assessed by an independent evaluator at $760,000, meaning the city has determined that its market value has increased by $320,000 since it was bought by Mr. Chrétien.

Overall, Mr. Chrétien is handing over five lots worth $760,000 in exchange for a single lot worth $212,000. To make up the difference, Mr. Chrétien will receive a tax receipt of $548,000 for his donation "for the environment."

The city does not plan to sell its five new lots, in a bid to protect the water intake from the damage that would come from the construction of new cottages on the lake. However, the independent assessment of the lots was based on their market value in a sale to would-be cottagers.

Diane Bruneau, a professor of law and expert in fiscal matters at the University of Montreal, said the tax receipt can lead to a maximum reduction of 48 per cent of its value – or about $263,000 – on Mr. Chrétien's final tax bill if he is a resident of Quebec for tax purposes. The receipt can lead to maximum tax savings of $254,000 if Mr. Chrétien is a resident of Ontario for tax purposes, added lawyer Christian Meighen at McCarthy Tétrault.

"Mr. Chrétien could have sold his lots for new cottages, but we will make sure that there is no construction there, and there will also not be any construction on the property that we are ceding to Mr. Chrétien," said Shawinigan's director of communications, François St-Onge.

Mr. St-Onge said he is unaware who initiated the land swap, although he did confirm that "Mr. Chrétien was interested ever since the RCMP gave back the land to the city."

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter