May 10, 2005

Concessions costing city $125M

Petition opposing Irving tax break presented to the legislature in N.B.

FREDERICTON

People opposed to a lucrative tax break promised to the powerful Irving interests by the City of Saint John presented a petition at the New Brunswick legislature last week that calls for the deal to be revoked.

Irving Oil and its partner, Madrid-based petroleum giant Repsol YPF, have negotiated a 25-year property tax break from Saint John for a proposed new liquefied natural gas terminal.

It’s estimated the tax concessions will cost the cash-strapped city as much as $125 million.

The deal has infuriated many Saint John residents, who are struggling with rising tax bills and deteriorating services.

“Our city is in dire straits,’’ said Bruce Court, a spokesman for Concerned Citizens for Fair Taxation and who presented the petition with almost 11,000 signatures.

“We’re looking at a debt of about $91 million. There is no money for pension fund losses and no money for roads, water or sewage. ... The Irvings know the city needs the money.

“Why can’t they be good corporate citizens and pay the tax?’’

Officials with the City of Saint John say they are concerned that without the tax break, Irving Oil and Repsol will build the $750-million terminal somewhere else.

The Irving family, estimated to be worth billions, is by far the largest employer in Saint John, where it owns and operates Canada’s largest oil refinery, as well as a pulp and paper mill and numerous other enterprises ranging from shipping interests to a steel plant.

NDP Leader Elizabeth Weir, who represents a Saint John riding, called on the Conservative government to debate the tax concession in the legislature.

“This deal mortgages the future for the next generation,’’ Weir said.

“Legally and morally, this 25-year deal must be brought to the floor of the legislative assembly.’’

Officials with New Brunswick’s Conservative government were non-committal.

Local Government Minister Brenda Fowlie said a request from the City of Saint John for an amendment to the Municipal Property Tax Act to allow the tax concessions is still being assessed by her department.

She wouldn’t give a timeline for any action on the city’s request.

Without the tax concessions, the annual municipal property taxes for the proposed gas terminal would have been in the $5-million range, according to provincial officials.

Saint John common council voted in favour of locking in the taxes for the terminal at $500,000 a year for 25 years with no adjustment for inflation.

Supporters of the terminal say it will have huge spin-off benefits for the New Brunswick port city.

The Irving Oil LNG proposal has overcome a majority of the regulatory hurdles it faces. It is scheduled to be built by 2008.

The Canadian Press

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