Well I knew it wouldn't last CBC blocking me AGAIN

http://www.cbc.ca/news/canada/new-brunswick/tax-breaks-irving-oil-1.3889095

Irving Oil's tank farm and the tax break that keeps on giving

Some tax exemptions can live long after the problem they were designed to help goes away

By Robert Jones, CBC News Posted: Dec 12, 2016 6:03 AM AT

Irving Oil and the New Brunswick government squabbled in the 1970s over whether the company should get a property tax exemption for its storage tanks on the outskirts of Saint John. The exemption was finally adopted in 1980 and has stayed put ever since. (CBC)

New Brunswick Liberals could barely believe it.
After fighting throughout the 1970s with Irving Oil to force it to pay property taxes on its Canaport oil tank farm, Richard Hatfield's Progressive Conservative government was changing course.
In the summer of 1980, the government reversed its position and introduced legislation that proposed to grant the company the property tax exemption it wanted.

• Property tax concessions have cost N.B. nearly $380M over 40 years

"They have been scrapping for some years now about their storage tanks and pipelines." then opposition Liberal MLA Doug Young observed in the legislature.
"Can the minister indicate if this is meant to relieve the taxation burden of the Irving interests?"

Irving became vulnerable

A tax exemption for Irving Oil's tank farm took shape in 1980. The company had completed a Saint John refinery expansion just as a worldwide oil crisis began to unfold, so the New Brunswick government stepped in to help. (CBC)

In fact, there was a sense that Irving Oil was in trouble that year, and it was serious enough to make Hatfield relent.

Special property tax breaks in New Brunswick have been set up to address many problems over the decades.

But when those problems changed — even disappeared — sometimes the tax breaks didn't.
That's true of the 1980 deal to lift property taxes on the crude oil tank farm, which has become one of the longest-running property tax deals in New Brunswick.

Crisis soon ended

The troubles faced by Irving Oil were serious but also short-lived. Still, decades later the tax deal is still in place.

'A number of things were taken into consideration. One was the importance of the refinery to the province of New Brunswick.' - Richard Hatfield, former premier

The history of the deal is well documented in old court decisions and New Brunswick legislature transcripts.

Irving Oil pushed hard to get a tax break at the tank farm for nearly a decade but the province held firm the company should pay full taxes — even taking Irving to the Supreme Court of Canada in 1975 over the issue and winning.

Irving had invested heavily in its refinery in the 1970s, twice undertaking expansions. The company also built the Canaport oil tank farm, all designed to serve U.S. markets.

Consumption down

But a worldwide oil crisis in 1979 put Irving Oil in a difficult spot. Soaring crude prices drove petroleum consumption in North America down heavily and Irving Oil appeared genuinely vulnerable.

For years, former premier Richard Hatfield opposed concessions for Irving Oil's tank farm but changed his mind when the company appeared to be in trouble. (CBC)

Hatfield responded with the tax concession his government had long opposed.

"After the refinery was built the situation changed drastically with regard to the export of refined product to the United States," Hatfield told the legislature to explain his about-face.

"The government decided that … in view of the changing circumstances with regard to the export of refined product to the United States … that an amendment should be made to the Assessment Act.

"A number of things were taken into consideration. One was the importance of the refinery to the province of New Brunswick."

Troubles didn't last

Believing Irving Oil needed help, the government gave it a break on taxes valued at up to $500,000 per year.

The provincial government at the time said it was thinking of the importance of U.S. markets, among other things, when it established a tax exemption. (CBC)

But the troubles of 1980 proved to be temporary. U.S. petroleum markets rebounded strongly by the mid-1980s, and Irving Oil soon prospered.

The tax exemption on the oil tank farm, however, lived on.

Finance Minister Cathy Rogers acknowledges that may be a problem.

Considering side-effects

Property tax concessions: What you need to know2:30

"We do have to look at what is relevant for today's purposes," Rogers said in an interview.

"Sometimes you make a tax exemption or a tax rebate or a tax credit for a particular purpose in time, and it's important to [ask], 'Is it still serving the same purpose?'"

The province won't say what the tank concession is worth today, only that it is "substantially more" than it was in 1980.

"This information is considered confidential and should be obtained directly from the property owner," said Service New Brunswick spokeswoman Nichole Bowman.

Irving Oil did not respond to a request to participate in this story.

Prefers evolving tax policy

Finance Minister Cathy Rogers says the durability of a tax exemption granted because of a long-ago oil crisis may be a problem and will be part of a review of all tax deals the province has with various sectors. (Shane Fowler/CBC)

Rogers said that as a general rule she doesn't believe tax breaks should continue indefinitely in the face of changing circumstances.

"It's like policy," she said.

"It's living and we have to keep making sure that it's relevant."

But government has been slow to move on old tax deals.

Several New Brunswick governments have come and gone since 1980 and none have made any changes to the tank farm tax exemption.

Not part of cost-cutting exercise

And Rogers acknowledged that the Gallant government itself did not look seriously at the tax break during last year's comprehensive "strategic program review."

 'If you make one change it may have an unintended consequence on another.' - Cathy Rogers, finance minister

This year the province also steered well clear of a second Irving Oil tax break embroiled in controversy — a little known provincial connection to the Canaport LNG properties

Last week the legislature gave third reading to a bill allowing Saint John to repeal its tax concession at the LNG site, after the city discovered Irving Oil had been collecting $12.25 million US in rent on the tax-reduced land for years.

Still a favoured place

The province agreed to let the City of Saint John repeal a tax concession at the Canaport LNG site, but a provincial concession on the same property remains. (CBC)

But a lesser known and nearly as generous New Brunswick LNG concession on the same property has been left untouched.

The province granted the port of Saint John a tax exemption in 1997 to help it transition from a federally controlled to a locally controlled body.

But that exemption included non-port property owned by Irving Oil, some of which eventually became home to the LNG terminal.

That made what would have been $6.5 million in provincial property tax on the terminal uncollectable.

Provincial break lives on

Although helping Saint John repeal its tax concession, the province has not done the same.

Rogers said her department is looking at every tax deal at once and wants to wait before taking action on any.

"We have to look at the whole, not just fragmented pieces. If you make one change it may have an unintended consequence on another," she said.

But not making changes has had unintended consequences too, in one case creating a tax break that has managed to live decades longer than the problem it was meant to help solve.

Edited and packaged: Connie Camp
Video by Paul Hantiuk and Earl Cabuhat

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33 Comments 

Cam Randal

When the oil crisis of the late 70's and early 80's ended, the tax breaks should have also ceased. The tax breaks for the Irving Corporation has gone on way too long.

The government and the citizens of New Brunswick should demand an end to the special tax deals for this multi-million dollar empire.

The politicians do not have the courage to stand up to big business, so it is up to the citizens to put an end to the generosity.

9 hours ago

 

David Raymond Amos

@Cam Randal Why do you think I ran for Public office FIVE times?

Better yet ask your self why CBC denied that I did?

http://www.cbc.ca/news/canada/new-brunswick/fundy-royal-riding-profile-1.3274276

2 hours ago

 

David Raymond Amos

@Cam Randal Well I knew it would last CBC is back to blocking me again. Imagine Methinks I was dumb to sing CBC praises earlier today because it had been allowing my comments but I can always change the title of my blog EH?

http://www.cbc.ca/news/canada/new-brunswick/new-brunswick-historic-tax-concessions-1.3887534

http://davidraymondamos3.blogspot.ca/2016/12/wow-cbc-allowd-comment-of-mine-out-of.html

At least folks can see this comment within one of my many blogs about the maice of in a heartbeat even if CBC does not allow it in here. EH?

Anyway is one of the many reasons why CBC ignores it mandate and acts very unethically against mean old me N'esy Pas Hubby Baby LaCroix and Minister Melanie Joly?

Fundy Royal, New Brunswick Debate – Federal Elections 2015 - The Local Campaign, Rogers TV

https://www.youtube.com/watch?v=-cFOKT6TlSE

Just now

Freddy Rose

"Irving Oil did not respond to a request to participate in this story.
Prefe"

I wonder if this story is being carried anywhere else in the province? Maybe in the newspapers?

LOL

7 hours ago

 

Content disabled.

David Raymond Amos

@Freddy Rose Watch for the Empire's newsrags spin on their greed and how they will influence the LIEbranos tomorrow though

2 hours ago

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David Raymond Amos
@Freddy Rose FYI CBC's questionable moderators and their malevolent bosses know that what you cannot you cannot see here can be viewed elsewhere

http://davidraymondamos3.blogspot.ca/2016/12/well-i-kne-it-wouldnt-last-cbc-blocking.html

Yet they block me anyway N'esy Pas Minister Melanie Joly?

1 minute ago