Cedarhill club owed $65,000 in PST arrears

Payment negotiated after threat to pull liquor licence

Ken Gray

The Ottawa Citizen

January 16, 2004

Ontario government officials threatened to pull Cedarhill Golf Enterprises' liquor licence before the company paid $65,000 it owed in provincial sales tax, a provincial official says.

That brings what the company owed both the provincial and municipal governments in taxes to close to $200,000. Mayor Bob Chiarelli is a director of the company, which owns Cedarhill Golf and Country Club just north of Barrhaven.

As a director of the firm, Mr. Chiarelli would have been personally liable for PST arrears.

Officers of the Alcohol and Gaming Commission of Ontario gave notice to the firm on June 5, commission spokesman Ab Campion said Wednesday.

After negotiations with the Ministry of Finance throughout September, a $30,000 certified cheque was paid and seven postdated cheques of $5,000 each were written, Mr. Campion said.

According to John Piazza, lawyer for Cedarhill Golf Enterprises, a numbered company that has agreed to buy Cedarhill has paid the provincial sales tax bill.

"There is not a cent owing," Mr. Piazza said. The lawyer emphasized that the licence was never revoked.

Company directors are liable for unpaid provincial sales tax, GST and source deductions, such as money collected from employees for income tax.

Information on the provincial sales tax came to light because the provincial finance ministry has an arrangement with the alcohol and gaming commission that liquor licences cannot be renewed if PST is owed to the Ontario government by the person or company holding the licence, Mr. Campion said.

Meanwhile, the municipal government is owed $127,000 from the Chiarelli family firm for back taxes from 2002 and 2003. An agreement is in place with an Ontario numbered company to buy the firm and pay the taxes.

That deal was to be completed on Nov. 15, but financing problems at the numbered company prevented completion of the agreement. The numbered company, 2032788 Ont. Inc., is currently operating the golf club, pending completion of the deal.

The city charges 1.25-per-cent interest per month on outstanding property tax bills for three years. In the fourth year, it can place a lien against the title to sell the property to collect the tax arrears.

The revenue from that sale covers the taxes and any charges relating to those taxes. The rest of the money goes to the owner or other entities having claims on those funds, such as mortgage holders.

The Canada Customs and Revenue Agency would not reveal if Cedarhill Golf Enterprises owed any tax money, citing privacy concerns.

Mr. Chiarelli declined to comment.

Mr. Chiarelli's brothers, Richard and Patrick, are the president and secretary-treasurer of Cedarhill respectively.

The mayor said earlier this week that the family firm has experienced financial problems and that is why the municipal tax arrears have occurred.

The mayor said he has had few dealings with Cedarhill over the past six or seven years and the family has wanted to get out the business because of other professional commitments.

However, the mayor did say he participated in the decision to sell Cedarhill.

Bob Williamson, manager of the golf course for the numbered company, said he hopes the deal to buy Cedarhill will be completed within 45 days.

© The Ottawa Citizen 2004