Big Property Tax Cut for Canaport LNG Terminal
With its controversial property tax deal with the City of Saint John rescinded, the Canaport LNG Terminal has now received a major reduction in its property tax assessment.
CBC reported today that New Brunswick’s property tax assessor cut the appraised value of the natural gas facility by nearly $202 million for 2017. It’s now assessed at $98 million, compared to last year’s assessment of $299.5 million.
According to CBC that reduction will save Irving Oil, a partner in Canaport LNG with Spanish company Repsol, about $5.5 million in property taxes. Saint John based Irving Oil owns the land the facility sits on.
Since 2005, Irving Oil had been paying $500,000 in property taxes under a special arrangement with the municipality. Last year Saint John Common Council asked the provincial government to repeal the legislation that covered the deal.
Today Service New Brunswick, which handles assessments, issued a statement defending the reduction. It says that lower gas prices and greater supply in North American markets made the terminal worth less. It also noted that an assessment on the terminal had last been done a decade ago because the Canaport LNG Terminal’s property tax had been frozen by legislation.
“The new assessment of the Canaport LNG Terminal was done by an independent third party expert with international experience in the valuation of petroleum and liquefied natural gas facilities. The depreciation of the property is due to external forces caused by a decline in commodity price and an over-supply in the natural gas industry. This has affected both the competitiveness and market value of the Saint John facility,” said SNB is a statement.
Saint John Mayor Don Darling issued a statement today stating, “[T]his was an anticipated step in the process.”
“We have been clear from day one that this repeal was about doing the right thing, taxation fairness and creating a level playing field.”
“While the process is still not complete and complex, in terms of an appeal mechanism, the new tax levy of $2.6 million announced today would represent a sizeable increase over the current $500,000 collected,” said Darling.