The City of Winnipeg has taken the unprecedented step of shuttering a local business after it failed to pay taxes for six years — but the owner says there must be a mistake.
“It’s very frightening. I have 25 employees and this is (the city’s) wrongdoing, yet they want to shut me down,” said Hardev Singh Sandhu, owner of London Limos.
“I’m at the point where I am kind of feeling helpless and hopeless.”
MIKE DEAL / FREE PRESS
Hardev Singh Sandhu, owner of London Limos says the city’s tax department has incorrectly assessed his Erin Street business for years.
According to city records, the tax department issued an order on June 27 to close the long-standing luxury car and limo service until a debt of nearly $145,000 has been cleared.
A city spokesperson confirmed it is the first time such an order has been enacted.
Sandhu is set to meet with city council’s finance committee on Monday to appeal the decision.
“I believe there has been a misunderstanding regarding the tax assessment and billing of my business and I am requesting a comprehensive review of the situation,” Sandhu wrote in his appeal letter.
“London Limos is a small company that has been significantly impacted by the COVID-19 pandemic and has relied on government loans to survive. The tax bills … were based on incorrect information and have posed a significant financial burden on our business.”
Speaking to the Free Press by phone, Sandhu said he believes the city’s tax department incorrectly charged him as the sole renter of a 10,000-square-foot building at 1595 Erin St. between 2018 and 2023.
He said he can prove to the committee that he was one of four businesses occupying the building throughout those years, with London Limos using less than 1,000 sq. ft.
Records show a city inspector visited the business in 2022 as part of the following year’s tax assessment and confirmed London Limos was using only a portion of the building. As a result, the annual taxes were reduced more than tenfold.
“They clearly know that this is the wrong bill because their own inspector came and all of a sudden my bill went from $10,000 down to $600,” Sandhu said.
The city said Sandhu remains on the hook for the existing fees because he never appealed the previous assessments, despite having numerous opportunities.
”If a change to the business assessment is required based on new information, the City of Winnipeg Charter only provides for the City to correct the current year plus one year prior. There is no legislative ability to go back to years before 2023,” reads a report from the tax department to the finance committee.
The report includes a summary of actions taken by the city to settle the debt, including sending more than a dozen bills, reminders, appeal notices, warnings and collection warrants since 2018.
Sandhu said he was operating the business primarily from home around the time of the pandemic and repeatedly missed the annual 10-day window to file appeals. Some of the other notices may have been inadvertently delivered to other businesses at the Erin Street building, he said.
In June, Sandhu offered payments of $500 per month to address the debt, but a supervisor in the taxation department explained that the city required a $20,000 down payment and monthly payments of $6,400, the report says.
Coun. Jeff Browaty, chair of the finance committee, declined to comment on the situation until after the upcoming appeal hearing.
He previously told the Free Press the city would only issue an order to cease operations in rare cases, when other options to collect debts were exhausted.
There are currently around 440 Winnipeg businesses in arrears, accounting for approximately $1.4 million in unpaid taxes, a city spokesperson said.
Loren Remillard, president of the Winnipeg Chamber of Commerce, said the business community will be watching the outcome of Monday’s hearing to ensure the city took all possible steps to help Sandhu settle the debt before enacting the last resort measure.
“We don’t we want to judge the city’s actions, we want, at a bare minimum, to better understand what steps the city took,” he said.
“If the city can show, yes, we are using this last resort because we’ve exhausted everything else, then the message to the business community is that the city is prepared to be responsible in this mechanism.”
tyler.searle@freepress.mb.ca
Tyler Searle
Reporter
Tyler Searle is a multimedia producer who writes for the Free Press‘s city desk. A graduate of Red River College Polytechnic’s creative communications program, he wrote for the Stonewall Teulon Tribune, Selkirk Record and Express Weekly News before joining the paper in 2022. Read more about Tyler.
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