'Some of the assessments are crazy': Canaport LNG change prompts questions

The New Brunswick government says the public can have confidence in the quality and fairness of its property tax assessment system despite controversy swirling around its re-evaluation of the Canaport LNG facility.

But city politicians in Saint John are not so sure and are anxious to hear from consultants they hired in January to study assessments the province does in the city.

"Some of the assessments are crazy. I just don't know where they come from and how they get them," said Coun. Gerry Lowe.

"As you know we're bringing those two people in from Ontario to look at everything. Hopefully they can give some guidance as to where we can go."

Saint John has hired municipal finance and taxation experts Harry Kitchen and Enid Slack of Ontario as part of its fight to revamp the property tax system.

• Saint John to hire experts to look at overhaul of tax system

Assessment value slashed by $202M

Last week the province announced it had cut the assessed value of the Canaport LNG property by $202 million on the eve of it facing full municipal property taxes.It cited depreciation caused mostly by the facility's poor economic performance as the reason.

On Friday, Saint John Deputy Mayor Shirley McAlary, crashed a briefing on the Canaport LNG reassessment being held for reporters by provincial property tax officials. She challenged them to explain why business troubles at the Canaport LNG facility led to a big cut in its assessment, when the success of other businesses like the Irving Oil refinery do not seem to cause assessments to climb.

"How do you explain that?" she asked.

The province's director of property valuation explained that although assessments do not consider whether a business is successful or not, the market value of land and buildings can decline when an enterprise is struggling.

"We've got to be very careful in property assessment that we don't value the business portion of the property," said Stephen Ward. "Our mandate is to value the land and the buildings [but] in doing so, depreciation can have an effect on the property."

In a separate interview with CBC News, Ward said despite the sudden revision of the Canaport assessment from $299.5 million to $98 million there is no need to question the reliability or accuracy of other large industrial assessments causing concern in Saint John such as the oil refinery.

"With regard to the refinery assessment we're quite confident with our assessment on that property because we're just assessing the land, the buildings and the pipelines," said Ward. "We are quite confident with our valuation and our ability to assess that property with our own staff."

Bothered by assessment

But that's where councillors like McAlary and Lowe part company with the province.

Lowe says after years of trying to understand how property taxes work he still doesn't get why industrial properties in New Brunswick are assessed so much lower than elsewhere.

"I'm talking millions and millions and millions difference between provinces," said Lowe. "It's the assessment that bothers me."

Saint John has New Brunswick's largest collection of privately owned industrial properties and there is evidence they do not rank as high among the province's most valuable properties as they wouldin other parts of Canada.

For example in Regina, the city's 426-bed general hospital is assessed for taxes at $299.5 million.

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The 445-bed Saint JohnRegional Hospital is assessed at $256.2 million similar to Regina General but the 300,000-barrel per day Irving Oil refinery is assessed at $98.6 million, which is about one-third of its much smaller Regina counterpart.

The 130,000-barrel per day Co-op oil refineryis assessed at $290.3 million.

Ward insists provincial assessors are following rules set down by the province for the refinery and other industrial properties like the LNG site.Lowe says if that is the case, the city will have to look at getting those rules changed.