End to Canaport tax break wins all-party support

A bill to end a controversial tax break for the Canaport LNG facility in Saint John has the unanimous support of all three political parties in the legislature.

Liberal cabinet minister Ed Doherty, who represents Saint John Harbour, introduced the legislation Thursday.

The full title of the bill is An Act to Repeal An Act to Comply with the Request of the City of Saint John on Taxation of the LNG Terminal.

It will repeal a 2005 statute passed by the PC government of Bernard Lord to exempt the terminal, co-owned by Irving Oil, from the regular property tax assessment formula.

City would be owed millions

Instead, the city was allowed to freeze the Canaport tax bill at $500,000 for 25 years. Without the special treatment, Canaport would owe the city $8 million this year.

"With the repeal of this act, the non-residential municipal tax rate would be applied to the market value assessment of the LNG terminal property," Doherty said.

The government hopes to pass the bill before Christmas so it can apply to next year's property tax assessments in March.

The two opposition parties say they'll support the repeal.

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PC Leader Blaine Higgs noted the Lord government passed the 2005 legislation at the request of Saint John city council. He pointed out the current council is now asking that it be undone.

"I think we should be working closely with municipalities, so if that's what they want, that's fine," said Higgs, a former Irving Oil executive. "That's what we'll support."

David Coon, the leader of the Green party, also signalled his support, though he said the repeal should have happened a long time ago.

The tax break "spanned two administrations of the city of Saint John," Coon said. "It should have been done a long time ago."

Next year's tax revenue will be put in a trust fund in case Irving Oil appeals the assessment.

That's because the revenue boost for Saint John will change how the province redistributes money to other municipalities through an equalization formula designed to help poorer communities.

Money for other municipalities

With Saint John getting more tax revenue, it will get less from the equalization fund, freeing up more of that money for other municipalities.

Saint John didn't want to risk losing out on its equalization money and then also lose the new tax revenue if Irving won an appeal of the assessment.

The province agreed to the trust-fund arrangement after consulting the three associations representing New Brunswick municipalities.

At the time Saint John agreed to the tax break, then-mayor Norm MacFarlane said that then-Irving Oil CEO Kenneth Irving told him the company needed the exemption to be able to locate Canaport LNG in Saint John.