New Brunswick

Irving Oil claims it's a myth company gets off easy paying taxes

Corporations and business groups continued their attack Thursday on a proposal to extend property assessments and taxes to cover their machinery and equipment.

Company pays highest tax bill of any refinery outside Alberta, says executive

Saint John Harbour MLA Gerry Lowe speaks with Andy Carson from Irving Oil at the second day of hearings on a proposal to make heavy industry pay more property tax. (Jacques Poitras/CBC)

Corporations and business groups continued their attack Thursday on a proposal to extend property assessments and taxes to cover their machinery and equipment.

Irving Oil, which operates the largest refinery in Canada in Saint John, blitzed members of a legislative committee with a series of charts and tables designed to show them it's a myth that the company gets off easy paying taxes. 

Irving executive Andrew Carson said the company has "the highest tax bill of any refinery outside Alberta" and is facing steep taxes on a number of fronts. 

"New Brunswick is not a low-cost jurisdiction," Carson said. "We pay fairly high corporate income taxes, we have high personal income taxes, we have fairly high WorkSafe New Brunswick rates and we now have a fairly high carbon tax." 

The legislature's law amendments committee is studying a motion by Saint John Harbour MLA Gerry Lowe to expand the assessment base and end or reduce exemptions.

Motion not binding

The plan already appears doomed. If passed by the full legislature, the motion is not binding on the Progressive Conservative government.

And Finance Minister Ernie Steeves declared yesterday that he has already made up his mind to oppose the measure. He said it would apply property taxes to farmers' tractors and ovens in pizzerias.

Charline McCoy and Miramichi Mayor Adam Lordon spoke on behalf of the Cities of New Brunswick Association.

Miramichi Mayor Adam Lordon responded to that claim during his appearance at the committee Thursday. 

"That is not the case," Lordon said on behalf of the Cities of New Brunswick Association. "That is not what we're advocating for. I always think it's important to have a debate on the facts rather than throwing misinformation into the mix as well."

Meanwhile, Saint John Mayor Don Darling pushed back at suggestions that floating the idea is anti-industry or anti-business.

He said it stems from a realization that the municipal tax structure hasn't changed since the Equal Opportunity reforms in the 1960s, when cities weren't playing as large a role in the economy. 

"The legislation we're dealing with is decades and decades old," he told reporters.

At the hearing, Darling repeated his call that the province hand over its portion of property tax revenue in the city to the municipality and eventually give it the power to tax industry directly. 

Lower tax burden

Lowe's motion was inspired by a report prepared for Saint John city council in 2017 that examined taxing machinery and equipment.

The rookie MLA and former city councillor says the revenue would allow the city to lower the tax burden on residents, which might help slow the migration of city residents to neighbouring municipalities.

Irving Oil and the New Brunswick government squabbled for years over whether the company should get a property tax exemption for its storage tanks on the outskirts of Saint John. The exemption finally went into effect in 1980 and has stayed put. (CBC)

He has repeatedly cited the 800-acre Irving refinery as a potential source of new property tax revenue.

On Wednesday, Green Party Leader David Coon brought up a supposedly temporary 1980 law to exempt Irving's oil storage tanks from provincial property taxes, a measure still in place almost four decades later. 

Carson said Thursday the exemption applies to only 10 per cent of the company's tanks at the refinery and its nearby Canaport facility.

"So the balance of our tanks [are] fully assessed, fully taxed municipally, provincially," he said. "They're not treated in a different way." 

Carson urged the committee to take into account the company's other contributions to Saint John, including the property tax it pays on its other properties and its involvement in the community. 

For the most part, Carson avoided being drawn into discussion about the Irving family's wealth. Lowe asked him about corporate profits and whether the refinery makes "good money" from all the oil-based products it sells.

But Carson avoided being pinned down.

"It would vary through the year, in all honesty," he replied. "There are generally times in the year when certain products are in higher demand."

Later in the morning, Coon challenged the refrain from various business groups about New Brunswick's high tax burden putting new investment in the province at risk.

'Unlikely to invest'

When Sheri Somerville of the Atlantic Chamber of Commerce said businesses in the province are already overtaxed, Coon pointed to a 2016 Conference Board of Canada report that said New Brunswick had the second-lowest corporate tax burden in the country.

She said there have been new costs since then, including the federal carbon tax, that makes business owners "uneasy" and unlikely to invest. 

"Would you not agree that if we have a sub-standard health-care system, that would be a barrier to new investment, to attracting business to New Brunswick? Or if we have a substandard education system or, God forbid, both?" 

Somerville answered by calling for a broader tax review.

"There is no one silver-bullet solution that we can apply," she said. 

Lordon also called for a broad tax review, even though the eight cities he was representing aren't opposed to Lowe's proposal.

"We're in support of a perhaps higher level of taxation on equipment and machinery, but we don't think that is enough," he said. "It has to be about more than that. It's got to be a lot broader."

Lordon said cities are playing a greater role in the province, with 91 per cent of New Brunswickers living within 50 kilometres of a city but most of them not contributing through taxes to the cost of city services they use.

He said cities need taxation powers to match their growing role as "regional hubs."

Lowe's proposal "would be one very small piece of one very large and complex puzzle," Lordon said. "This is not going to create the broad systemic change that we desperately need in this province. Looking at only one piece in any way is not going to be enough." 

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