June 10, 2006

Saint John city official backs secret tax deal for LNG plant

by Van Ferrier

The Dominion - http://www.dominionpaper.ca

Saint John city manager Terry Totten has announced that the mayor's secret deal to grant Irving Oil and Repsol of Spain a generous break on property taxes was a good idea. The deal was made last March to help the energy companies build a Liquified Natural Gas (LNG) plant in New Brunswick's largest city.

According to CBC News, the companies will pay $500,000 per year in property taxes for the next 25 years, about one-tenth of what the land could have brought in.

Mayor Norm McFarlane went ahead with the decision despite opposition from city councillors, including Deputy Mayor Michelle Hooton. City Councillor Ivan Court said the deal was fiscally irresponsible, highlighting the fact that "[the municipality] gave a preferential rate to a company and it cost the taxpayers of this city $112.5 million over 25 years."

At the time of the deal, McFarlane told council that the companies gave him a midnight deadline to make the secret deal, or the plant would not be built. Totten said the loss in property taxes would be offset by investment and employment opportunities at the facility.

Provincial NDP Leader Elizabeth Weir says the proposed tax break for the LNG plant violates the fundamental principles of equal opportunity. Weir told CBC News that just as Irvings was negotiating this special deal, many New Brunswickers were receiving notices in the mail that their own property taxes were going up.

Once completed in 2008, the plant will link up with a controversial pipeline that has prompted opposition by a coalition of anti-LNG protestors, environmental activists and citizens opposed to having the 30-inch diameter pipeline run through the city.