Brian Gallant announces Canaport LNG tax deal will be repealed

The 2005 tax deal that gave Canaport LNG property owner Irving Oil Ltd. a 90 per cent discount on its property tax bill until 2030will be repealed effective next year.

"We're cancelling a tax break that was given to the Canaport LNG terminal," said Premier Brian GallantTuesdayat a news conference in Saint John.

"It's as simple as that."

• Saint John request repeal of Canaport LNG tax deal
• Gallant government willing to repeal Canaport LNG tax deal

Gallant says the new legislation will be introduced in Novemberand is being drafted at the request of Saint John city council and with the consent of other municipalities that could be impacted.

Irving Oil currently pays $500,000 on theCanaportparcel, although the property's assessed value is $299.4 million.

Without the discount, the company would be expected to pay more than $8 million per year in property taxes.

Once the repeal is activated, the new revenue will be held in trust accounts until the dust has settled on the question of whether Irving will appeal its tax assessment and theoutcome of such an appeal.

"When the property valuation is finalized, any balance in the account, with applicable interest, will be paid to Saint John and other entitled local governments," said Gallant.

Saint John Mayor Don Darling says it's too soon to say what the city's net gain could be.

"If there's any new increase in taxes collected, and there's no guarantee that this will happen, it will go directly to support community priorities such as roads, recreation and safety services for the residents of Saint John," said Darling.

Equalization impact

The province has a formula that shifts some funding from municipalities with strong tax bases toward those with weaker tax bases.

In 2016, Saint John's equalization payment through the formulawas $17.5 million.

It's possible that some of that money could be clawed back and redistributed to other towns and villages.

Miramichi, for example, which currently receives $5.4 million in equalization, could expect more.

Other beneficiaries would likely includeEdmundston, currently receiving $3.5 million in equalization,Bathurstat $2 million, andMonctonat $2.3 million.

Prior to the premier'sannouncementtoday, the province said it was looking to other municipalities to agree to the trust fund concept until everything is sorted out.

The province didn't want to be on the hook for funds owed back to Irving in the event that the company's tax assessment is altered to Irving's advantage.

Gallant prefaced today's announcement by saying it was the Bernard Lord Conservative government that approved the tax break in 2005 and that the Liberals of the dayopposedit.