Tuesday 14 March 2023

$700K in property tax refunds due after N.B. retracts assessment increases on 2 forestry mills

 
 
 

$700K in property tax refunds due after N.B. retracts assessment increases on 2 forestry mills

J.D. Irving Ltd. and Twin Rivers Paper Company have 2021 and 2022 assessments cut on two mills

Saint John City Councillor Gerry Lowe said he is stunned to hear about the reductions because the original 2021 assessment increases on the mills appeared bulletproof given the multi-year review Service New Brunswick launched to analyze and implement them.

"How could they put it up and say they did a complete study and then turn around two years later and knock it down," said Lowe.

 "It's off the wall how they do things."

Anne McInerney, J.D. Irving Ltd.'s vice president, communications, said in an email the company challenged the 2021 assessment of $27 million given to the paper mill soon after receiving it. The amount was $3.7 million (16 per cent) higher than the 2020 assessment.   

With a decision on that dispute still pending, the company then challenged the mill's 2022 assessment which Service New Brunswick had issued in the meantime for $27.3 million, a one per cent increase from the 2021 amount.

A tall ofice building on a city corner. J.D. Irving Ltd. is New Brunswick's largest forestry company. It runs a pulp, paper and tissue mill in Saint John that will pay a combined $4.7 million in municipal and provincial property tax in 2023. That is down from $6.4 million it paid in 2012. (Roger Cosman/CBC)

Twin Rivers Paper Company followed a similar pattern with assessment increases it got at the same time on its pulp mill.

Sometime earlier this year, Service New Brunswick informed both companies their challenges had been successful. In Irving's case, the agency lowered the assessment on the mill by $3.5 million in each of the two years in dispute. The reduction for Twin Rivers is closer to $4 million per year. 

It is the right decision, according to McInerney.

The review "was successful given economic challenges in the paper industry, including consumers' growing reliance on screens over paper," she said.

'Property should be assessed at a lower value'

Caryn King, the director of strategic marketing with Twin Rivers, agreed. 

"We concluded that it merited an appeal and we availed ourselves of one through Service New Brunswick, as any ratepayer is permitted to request," said King in an email.

"We agree with Service NB's determination that our property should be assessed at a lower value."

The lower assessments require property tax refunds to J.D. Irving Ltd of about $170,000 of what was billed on the mill for the 2021 year and $165,000 for 2022. The refund for Twin Rivers is closer to something over $180,000 for each year.

A smokestack is visible through a cluster of trees. The Twin Rivers Paper Company pulp mill in Edmundston is a major employer and tax payer in northeastern New Brunswick. It will save about $180,000 per year in property tax with assessment reductions it has won from the province. (Étienne Dumont)

Over half of those amounts involve municipal property taxes that were paid to Saint John and Edmundston, although the province alone will pay the refunds since it is responsible for assessments and revisions.

However, the mill's reduced assessment will lower tax revenue to the cities going forward. Lowe said that is a problem, and he questions why Service New Brunswick wouldn't have more faith in the extensive work it did assessing the mills and deciding on the increase.

"They put it up, and they reduced what they put up by 90 per cent," said Lowe. 

"They did a two-year study of it and they were wrong by 90 per cent. How could anybody do that? They should be replaced." 

Longstanding issue

Property taxes on the mills have been a hot issue for the last decade.

In 2012, the two plants were assessed to be worth a combined $113.1 million by Service New Brunswick, and they paid municipal and provincial property taxes that year of $5.5 million. 

In 2013, Service New Brunswick dropped their assessments almost in half as part of a province-wide reduction granted to all pulp and paper mills to help them weather tough markets. 

More assessment decreases followed in subsequent years until 2019, when the assessed value of the two mills had fallen to a combined $45.2 million, and they were paying $2.203 million in annual property taxes — 60 per cent less than in 2012.

A stone sign in front of some green trees with ettering on it that says Irving Paper. Irving Paper employs 325 people on Saint John's east side. It bills itself as North America's largest 'supercalendared' paper producer, with an annual production capacity of 410,000 tonnes. (Roger Cosman/CBC)

In 2019, Lowe was a Saint John MLA and he initiated two days of hearings at the legislature into how major industrial properties are assessed and taxed in New Brunswick.

At those hearings, Service New Brunswick officials revealed a major, multi-year and in-depth "reinspection" of pulp and paper mill properties was underway to follow up on the 2013 reductions, and the province would be resetting assessments at new levels based on the results.

"They are significant properties and they are complex properties. It takes us two to three years to actually do a full, complete reinspection," then-executive director of assessment services, Stephen Ward, told the hearing.

"We have three people on our heavy industrial team. They are specialists. They specialize in these heavy industrial properties. That is all they do, heavy industrial property valuation. They are trained. They are specialized with specific expertise in the valuation of these properties."

'Enduring consequences'

Service New Brunswick eventually increased the assessed value of the Irving paper mill and Twin Rivers pulp mill in 2021, based on that specialized and in-depth review, by $3.7 million and $4 million respectively.   

Although not pleased with the decision at the time, J.D. Irving Ltd. did acknowledge in a press release the 2021 assessments were the result of an "independent review of market values," and it had been given a chance to present its side of the issue.

"We co-operated fully with the work of Service New Brunswick," said the company.

Two years later, Service New Brunswick has retracted most of the increased valuations on the two mills but with little explanation as to why.

In an email, Service New Brunswick confirmed that it did change the assessments after the companies asked for a review and said that is part of normal reviews and market analysis it does on all properties to identify whether "improvements or changes" are required.

Lowe is not sure he believes that, but said whatever caused the change it will have enduring consequences.

"I just shake my head when they do things like this," said Lowe.

"It affects us in the years to come. We will definitely be getting less taxes in the city than we got in 2021." 

ABOUT THE AUTHOR


Robert Jones

Reporter

Robert Jones has been a reporter and producer with CBC New Brunswick since 1990. His investigative reports on petroleum pricing in New Brunswick won several regional and national awards and led to the adoption of price regulation in 2006.

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160 Comments
 
 
 
David Amos
Welcome back to the Circus 
David Amos
I wonder if SNB has found my Harley yet  
 
 
 
 
valmond landry  
elected by the people for the people, whow!! what a circus.  
 
 
David Amos

Reply to valmond landry  
I see somebody else has figured it out 
 
 
Bobby Burke 
Reply to valmond landry  
Yes, elected by the “Poor”, & “Controlled by the “Rich”! That’s what Churchill bragged about! 
 
 
 
 
 
Charlene Bartlett
What about my refund ? My residential property taxes went up an additional $238 this year and $230 last year ? What am i paying for ? I have no sidewalks or street lights, No arena or swimming pool or Post office. I live on a road with three heaves in them that will take off the bottom of your car and numerous potholes . This road is amongst the last roads to be plowed. Power is always the last to be restored. I rarely see a police car on my road protecting our streets. We were forced into amalgamation to lower cost for Government and yet they raised our taxes and give Irvings a break.  
 
 
David Amos
Reply to Charlene Bartlett 
Good Day Neighbour  
 
 
Charlene Bartlett
Reply to David Amos
Good Day to you !  
 
 
Bobby Burke
Reply to Charlene Bartlett  
I keep saying this every time something like this happens(&far too often), “They couldn’t stoop any lower”!!? ....Wrong again! 
 
 
Lou Bell
Reply to Charlene Bartlett  
And did YOUR home increase in value ? If you sold it today would you ask the same price you'd have asked 3 years ago ?? Certain you'd be asking more !! There's your refund ! Funny how someone who bought a house 50 years ago for 79,000 dollars thinks that's what they still should be paying taxes on ! 
 
 
Charlene Bartlett
Reply to Lou Bell
I don't plan on selling it. $478 may not be a lot for you but for for those living pay cheque to pay cheque and with the price of groceries and home heating , that is a lot of extra money. If Higgs wanted to give anybody a tax break how about the middle class who are keeping this province going ? Irving doesn't need the break but the average person does. I don't have Swiss bank account and hide money to avoid taxes .  
 
 
David Amos

Reply to Lou Bell  
Cry me a river
 
 
 
 
 
 
Winston Gray  
The most obvious grift in history is the Irving’s grift of NB taxpayers.  
 
 
Samual Johnston 
Reply to Winston Gray 
oh please - it is corporations and government --- the rich an politics. Twin Rivers is not Irving owned is it? Just another case of corporate power in general 
 
 
Donald LeBlanc 
Reply to Samual Johnston  
Well, they couldn’t just do it for Irving although they would have loved to.
 
 
Samual Johnston  
Reply to Donald LeBlanc 
According to many they could have. But the fact it they are the biggest corp here so they are the focus even though corporations in general get the same treatment. Is a corporate ‘friendly’ world out there. Definitely not a ‘fair’ world. 
 
 
David Amos

Reply to Winston Gray 
Cry me a river
 
 
David Amos 
Reply to Donald LeBlanc 
I agree
 
 
 
 
 
Kyle Woodman 
I hope JDI can survive this downturn in the paper industry. I know they run on a very thin profit. They have only been able to accumulate a few billion over the years. Good thing we kept stumpage rates super low or that could have been the end of them. 
 
 
David Amos

Reply to Kyle Woodman 
Surely you jest 
 
 
 
 
 
 
Micheal Grey 
Higgs needs to go. I would even accept a Liberal government at this point and I can't stand the Liberals. 
 
 
Dan Lee 
Reply to Micheal Grey 
same..........family voted con all our voting lives........never again 
 
 
Greg Miller 
Reply to Dan Lee 
Problem is the other party is no better (perhaps worse). 
 
 
Winston Gray 
Reply to Greg Miller 
They aren’t worse, they invest in social programs for Canadians, people complain they spend too much on Canadians, at least it is spent on us and not pocketed. 
 
 
Samual Johnston 
Reply to Micheal Grey  
oh you know the liberals are the exact same -- everyone knows it
 
 
Marc Martin 
Reply to Micheal Grey  
This is why I vote for them Federally, I am all for these social programs for Canadians.  
 
 
Byron MacLaggan 
Reply to Micheal Grey    
There are more than 2 political parties in NB. We have the Green Party and NDP. 
 
 
James Smith
Reply to Micheal Grey 
same. Family was conservative - never again. Voting for change! 
 
 
Archara Goldehere  
Reply to Greg Miller  
Nothing in my 60 years in NB has been worse then Higgs --- Never again PC for me -- 
 
 
Archara Goldehere  
Reply to Byron MacLaggan   
Maybe CBC should do a story on all so we can educate ourselves before the election -- I'm looking at Green for NB Or NDP
 
 
David Amos
Reply to Archara Goldehere  
Call me I can educate you
 
 
Donald LeBlanc
Reply to Micheal Grey
We need to hear from the Liberals on this. They are way too quiet. Gallant said one right thing in 2017, SNB Property Assessment needed to be replaced. 
 
 
Bobby Burke
Reply to Micheal Grey
Two wings of the same bird!
 
 
 
 
 
 
 
 
James Smith 
No way another tax break for Irving from the higgs government? Our taxes go up and federal money targeted for middle and lower income tax money goes to their fake surplus while they underfund public services and healthcare. 
 
 
David Amos
Reply to James Smith
I see the light has dawned on Marblehead 
 
 
 
 
 
 
Shawn Tabor 
Crazy place 
 
 
David Amos
Reply to Shawn Tabor 
You knew it all along Yet you attack me? 
 
 
 
 
 
 
 

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