Gerry Lowe confident end to Canaport LNG tax deal can be reached

A Saint John councillor isn't questioning the timing of the Gallant government's decision to potentially allow the City out of the controversial tax concession given to the Canaport LNG facility.

Saint John council voted in December to ask the provincial government to repeal the 11-year-old tax deal.

The Gallant government had initially indicated it would wait until after the May 9 municipal election before deciding how to move forward.

• Gallant government willing to repeal Canaport LNG tax deal
• Saint John councillors who want tax deal repealed hopeful after minister's comments

But that suddenly changed when Local Government Minister Brian Kenny sent a letter to Saint John councilsaying it would repeal the law, under certain conditions and the City had to respond by April 30.

Coun. Gerry Lowe said he had heard rumours that the provincial government was softening its position on waiting until after the municipal election before deciding on the future of the tax deal.

Lowe wouldn't offer a guess at what prompted the Liberal government to change course.

"I wasn't sure why, I'm just happy it did," Lowe said on Tuesday.

"I would rather this council, which voted 7-2, to do this, has an opportunity to look at it and not a new council."

Kenny's offer to accept Saint John's request to repeal the legislation did come with a catch.

The provincial government wants a guarantee from Saint John that the move will not cost the province any money.

The concern revolves around the property assessment done on the Canaport LNG facility.

The 2005tax concession freezes property taxes on land owned by Irving Oil and leased to the LNG development at $500,000 per year until 2030.

Taxes to the City will jump to $8.02 million per year if the concession is revoked based on the property's current assessment.

But because of the tax deal, Irving Oil has never challenged the property assessment and the provincial government is worried if that happens there could be a cost to it.

Lowe said the letter makes it clear the provincial government wants to be protected in the case that the property is reassessed and the value comes down.

But the councillor said he does not think that is enough of a reason to keep the tax deal.

"I'm sure [the] City manager and the commissioner of finance, who will go to Fredericton, will get this straightened out. I don't see a problem at all," he said.

Saint John Mayor Mel Norton said City staff have been asked to calculate the risks to Saint John if it agrees to the provincial government's condition. Norton said a response is expected soon.