Irving Oil defends Canaport LNG profits

Irving Oil is responding to criticism about its profits from the Canaport LNG site with a newspaper ad.

The ad appeared in Thursday's Telegraph Journal under the heading "A message to our home community."

"On an overall basis we believe that the returns generated by this project for our company are appropriate given the scale and risk associated with the undertaking" states the message, which is not signed.

It goes on to discuss some $780 million in recent and planned investments the company is making in its Saint John projects.

And, in an apparent nod to a city council motion scheduled forMonday, it suggests revisiting the Canaport LNG tax deal could threaten potential future projects like the Energy East Pipeline and the conversion of Canaport LNG to an export terminal.

The risks associated with investments of this scale make it critical that we send the strongest signals possible to potential investors that we are not a community that rethinks commitments after investments have been made.- Irving Oil Ltd. statement

"The risks associated with investments of this scale make it critical that we send the strongest signals possible to potential investors that we are not a community that rethinks commitments after investments have been made."

Irving Oil declined an interviewrequest from CBC News.

The ad appears just days ahead ofMonday'sSaint John council vote that could see the city manager investigate profits the company is making from the Canaport LNG deal that have recently been reported by CBC.

The motion is co-authored by Coun. Gerry Lowe who says he simply wants fellow councillors to have as many facts as possible about the dollars involved.

Much new information about the profit sharing at Canaport is revealed in an Alberta tax case involving Irving Oil's Canaport partner Repsol.

Lowe rejects the suggestion reviewing the tax deal could threaten future energy projects.

"I don't think asking questions that are fair to ask are going to threaten this pipeline at all not a bit," said Lowe.

Irving Oil's tax bill for Canaport LNG $500,000 is just six per cent of what would normally be charged based on the assessment.

J.P. Lewis, a political scientist at the University of New Brunswick in Saint John, says the ad suggests Irving Oil is sensing growing public concern about the tax question.

"It shows the sensitive nature of this discussion and debate," said Lewis.

"You have Irving Oil trying to get their message out ahead of future decisions made. They're basically wading into the political game by partaking in a communications campaign."

Lewis saidit is easy for the company to raise the possibility that criticism could threaten the Energy East pipeline because of timelines and uncertainties that already exist with the project.

"It's kind of safe ground to say anything might risk the pipeline because at this point, who knows?" he said.