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Saint John's 'have-not' status debate revived amid equalization questions

Saint John councillors who pushed to repeal a special tax deal at the Canaport LNG development are not quarrelling with the idea that half of the revenues generated by the move might be clawed back by the province through reduced equalization payments.

Champlain Place Mall pays Dieppe 40% more in property tax than the Irving Oil Ltd. refinery pays Saint John

The Irving Oil spent $200 million upgrading its Saint John refinery last year but its property assessment only increased by about $700,000. This has rekindled a debate over the province's property tax rules and the equalization program. (Devaan Ingraham/Reuters)

Saint John councillors, who pushed to repeal a special tax deal at the Canaport LNG development, are not quarrelling with the idea that half of the revenues generated by the move might be clawed back by the province through reduced equalization payments. 

But the situation has resurrected a debate about whether Saint John really is a have-not city in need of equalization or has been made one by provincial tax policy

Coun. Gerry Lowe questions why the heart of New Brunswick's industrial economy needs equalization payments from the provincial government. (CBC)
Coun, Gerry Lowe, who helped push the effort in Saint John to undo the Canaport LNG tax deal, said he has no issue with new tax revenue reducing the city's equalization payments.

But he questions why the heart of New Brunswick's industrial economy needs equalization at all.

"I don't know the answer but there's a lot of wealth in this city we can't seem to tax properly," said Lowe.

The issue resurfaced two weeks ago in Saint John with news a $200-million Irving Oil investment in its state-of-the-art refinery last fall had increased its property tax assessment by less than $700,000 and its tax bill to the city by 0.7 per cent.   

The refinery is carefully maintained and has undergone constant improvements over the years, including a $1 billion upgrade in 2000 but is assessed and taxed as being worth $98.6 million.

Dieppe cashes in with Champlain Place

The Champlain Place Mall pays Dieppe 40 per cent more property tax than the refinery pays Saint John.

Coun. Shirley McAlary said she blamed New Brunswick's tax rules that exempt much of an industrial operation from assessment for shortchanging Saint John 

Champlain Place pays Dieppe about 40 per cent more in property taxes than the Irving Oil refinery pays Saint John. (Champlain Place)
"The city doesn't have any control.  We have to take whatever the assessment office tells us," said McAlary.

"We shouldn't be crying for tax dollars. We've got enough businesses and industry in this city to pay for anything we need."

On paper, Saint John's assessed tax base has slipped to third in the province behind both Moncton and Fredericton, not helped by low valuations of its industrial installations. 

Lowe said the fact Saint John is New Brunswick's largest recipient of municipal equalization funding at $17.5 million — eight times more than Moncton and Fredericton — is an artificial municipal poverty caused by the way the province treats industrial property tax assessment.

"So much of the things in industry are exempt.  That's why we hurt so bad and then they try and compensate us by sending in the $18 million," said Lowe. 

Lowe said he believes Saint John could live without any equalization from the province if property tax rules for industry were changed to allow for higher market value assessments. 

"We'd be a have city then," said Lowe.

About the Author

Robert Jones

Reporter

Robert Jones has been a reporter and producer with CBC New Brunswick since 1990. His investigative reports on petroleum pricing in New Brunswick won several regional and national awards and led to the adoption of price regulation in 2006.

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