The BC government is giving CN a multi-million-dollar tax break as part of its controversial purchase of BC Rail's freight operations.

Transportation Minister Kevin Falcon confirmed Wednesday that CN will not pay the provincial property transfer tax, which the NDP estimates will amount to $24 million. The property transfer tax will be instead be paid by the Crown-owned BC Railway Company. But the provincial government pegs the value of that tax at between $10 and $12M.

Falcon also revealed that the government incurred $14M in costs during the transaction, including $6M for a financial adviser, $5M for legal counsel, and $1M for "communications."

Those costs also include $600,000 for a "real estate adviser", $300,000 for the government-commissioned fairness evaluation, and $300,000 for "internal expenses." Falcon defended those costs during question period Wednesday in the legislature.

"They are well below commercial norms for a transaction of that size," he said while being questioned by NDP house leader Joy MacPhail. He said the property transfer tax break for CN was part of the "to-ing and fro-ing" of a deal which will bring a $1B benefit to British Columbians.

A "whole range of issues" were part of those negotiations, he said. "We agreed to absorb the property tax issue and we got (CN) to give on a number of other issues, including the discount for inter-line shippers," Falcon said. But MacPhail said the exemption amounts to "a $24-million taxpayer subsidy to CN."

MacPhail said this was just more hidden cost to taxpayers. She said government will also be shelling out $53M in penalties to lenders because, as a result of the transaction with CN, it is retiring $479M in long-term debt owed by BCR.