At its last ever meeting, the current Common Council voting to give the provincial government the green light to rescind the Canaport LNG tax concession but the confirmation of their earlier request comes with a long, complex list of conditions attached.
City manager Jeff Trail says if the property is currently assessed at nearly $300-million then the tax levy will increase at the start of next year to nearly $8-million and the unconditional grant will be reduced by about half.
“If at some point in the future, however, the assessment is successfully appealed then the city could be faced with repaying an amount in excess of the net of the new taxes and grant monies received,” says Trail.
The conditions listed include establishing an interest-bearing trust into which Trail says any incremental tax amounts from a new assessed value on the terminal would flow. As well, that the unconditional grant continue to be calculated on the current valuation of the terminal at about $18-million until and including 2031.
“If there is a subsequent appeal of the property valuation in later years, and we do anticipate that that would happen, then those incremental trust amounts would sit untouched until the appeal is resolved to the satisfacation of the city,” says Trail.
Trail warns that it is possible that at the end of all this the city could receive less than it does now.
Council received an extension to the deadline given to respond to a letter from provincial Minister of Environment & Local Government Brian Kenny which stated they were ready to move forward with repeal as long as they were assured they wouldn’t be “financially impacted as a result.” The province is seeking confirmation this is what council wants to do and members are aware of what could result from the move. The deadline is Tuesday, May 3.
The LNG tax deal freezes property taxes for Irving Oil at $500,000 annually until 2030. The deal was put in place by council when the city was competing against Maine for the LNG terminal and the concession helped secure the location at Mispec.
