Government silence on LNG tax break repeal ends

The provincial government notified the City of Saint John Thursday that it is continuing to consult about Saint John's request to repeal the Canadaport LNG tax break.

Saint John mayor says he's pleased with province's commitment to have plan in place for 2017 tax year

Premier Brian Gallant said the government has legislation prepared to repeal the Canaport LNG tax break that was granted in 2005. (CBC)

The provincial government notified the City of Saint John Thursday that it is continuing to consult about Saint John's request to repeal the Canadaport LNG tax break.

We made it very clear that we will [act].- Brian Gallant, premier

Saint John officially asked the province to repeal the tax break legislation in December, but hadn't had any official response until receiving the letter Thursday afternoon.

"We made it very clear that we will [act]," said Premier Brian Gallant. "We actually have legislation that we've prepared that we could have introduced to pass.

"They City of Saint John has made a proposal which they think would be better-suited for them," said Gallant. "That's fine. We're going to do the best we can to try to accommodate that."

In April, the Gallant government stated it would agree to Saint John's request to end the tax concession on the condition Saint John take financial responsibility for any errors in the assessed value of the LNG property that would require a property tax refund to Irving Oil if it successfully appealed the assessment.

The city made a complex counter proposal in May to make repealing the tax deal risk free to both the city and province but had heard nothing back until yesterday. 

The Canaport LNG property is assessed at $299 million, but the 2005 tax deal between the city and Irving Oil fixed the company's property taxes at $500,000 annually until 2031. Taxes on a $299 million property in Saint John would typically bring in $8.02 million annually.
Saint John' Mayor Don Darling said city council will discuss the letter it received from the province at its Monday meeting. (Connell Smith/CBC)

A statement released by Saint John Mayor Don Darling said he was "pleased with the language in the letter, and the province's commitment to have a plan in place for the 2017 tax season."

"A few elements on the file are complex and I know we will work together to move it forward."

Darling said the province's letter will be discussed by city council at Monday's meeting and "there may be more to share" after that takes place.