Irving Oil Ltd. gathered information on property taxes paid by six western Canadian oil refineries, but then excluded much of it from a presentation it made to a committee of MLAs last week.

The information would have shown the company's refinery in Saint John pays property tax at a rate well below the national average had it been shared with lawmakers.

It's a point Saint John Liberal MLA Gerry Lowe said he and other members of the committee receiving the presentation should have noticed and asked about but did not.

"We were more of a lay person trying to figure it out and we were just over powered," said Lowe.
"I didn't feel very good about that for damn sure."  

Study's results presented

Irving Oil executive Andrew Carson (right) and Graham Little appeared at a legislature committee hearing into industrial property tax issues last week. They told MLAs the company pays property taxes on its refinery "above average in the market." (Ed Hunter/CBC)

In a 33 minute appearance, Irving Oil executives Andrew Carson and Graham Little presented the committee with results of a study the company commissioned from the Altus Group detailing property taxes paid by Canadian oil refineries in seven provinces.

The Altus Group is a leading national property tax and valuation consulting company.

The presentation showed Altus had looked at property taxes levied on 14 Canadian refineries, but Irving Oil's presentation to MLAs gave detailed results on only eight of those. Property tax information gathered on the remaining six, all based in western Canada, was not fully disclosed.
Carson told MLAs Irving Oil pays $6.1 million on refinery related properties, an amount he expressed as an annual charge of $19.25 per barrel for the 320,000 barrel per day facility.

That he said was 20 per cent higher than $16 per barrel amount Altus documented was being charged to the average of eight refineries operating east of Manitoba.

"Our per barrel taxes paid are much higher than our competition and above average in the market," said the company's power point display that accompanied Carson's comments to the committee.

Exclusion affected comparison

But the $16 per barrel average Irving Oil compared itself to was affected significantly by the exclusion of the six western refineries.

The 130,000 barrel per day Co-Op oil refinery in Regina, Saskatchewan was billed $4.9 million in property taxes this year. That's a "per barrel" tax rate of $38, nearly double the rate Irving Oil pays on its refinery in Saint John. It's a comparison Irving executives did not share with MLAs at committee hearings last week. (CBC)

In British Columbia, the Parkland refinery in Burnaby pays $68 per barrel — more than triple what is levied in New Brunswick.

The remaining four western refineries excluded in the comparisons are in Alberta and all pay tax bills at rates significantly higher than those portrayed in the presentation to MLAs.

The largest of those four is an Imperial Oil refinery outside Edmonton that was charged $8.8 million in property tax this year — the equivalent of $47 per barrel on its 187,000 barrel per day capacity.

Just minutes from that facility is a refinery complex operated by Suncor. It was billed $16.4 million for property taxes this year — the equivalent of $115 per barrel on its capacity of 147,000 barrels per day.

Property tax below national average 

Carson did not respond to a request to ask a company representative about its presentation. But had all refineries surveyed by the Altus Group been compared to one another for MLAs, Irving Oil's rate of property tax of $19.25 per barrel would have been shown to sit well below the national average and in ninth place among the 14 facilities.

Lowe says the information Irving Oil did share involved comparisons of assessments, taxes, tax rates and taxes paid per barrel of oil processed and was difficult enough to follow without trying to spot information not being presented.

"I couldn't follow it. It was real confusing," said Lowe.
"They did a great job. The presentation was there. It's what isn't there from the other refineries I would love to be able to see."

Green Party leader David Coon who also sat through the presentation said he too failed to pick up on how information about western Canadian refineries appeared in early sections of Irving Oil's presentation but then disappeared when tax bills were compared in detail.

"The reality of the committee is there are so few minutes to ask questions you really have to focus on something in particular and follow it through.

"I was focused on other things. I didn't catch the western ones (refineries) dropping out," he said.

More questions

Irving Oil did make an argument to MLAs that western refineries operate in different business environments than eastern refineries and cannot be fairly compared. It suggested their proximity to oil supplies, access to pipelines to transport product and other factors were advantages not available in Eastern Canada.

"Any refinery's competitiveness and resilience are a function of its position in its regional market, not in Canada as a whole," said the company in its printed materials.


Saint John Liberal MLA Gerry Lowe holds a paper copy of the presentation Irving Oil made on property taxes to a legislature committee last week. The document excluded six western Canadian refineries when comparing "per barrel" property taxes. Including them would have shown Irving Oil's facility pays property taxes at a rate below the national average. (Robert Jones/CBC)

"There's questions now that I see I could ask," said Lowe.

Property taxes on oil refineries in Canada represent only a sliver of their operating costs and barely register in final product prices that reach consumers.

In New Brunswick last month any $50 fill-up by a motorist would have included only about two cents to pay for refinery property taxes. It's a fraction of the $18.97 in fuel taxes, $21.47 in crude oil costs and $9.54 in other refinery and dealer expenses and profits hidden in that $50 charge.

Corporations and business groups continued their attack Thursday on a proposal to extend property assessments and taxes to cover their machinery and equipment.

Irving Oil, which operates the largest refinery in Canada in Saint John, blitzed members of a legislative committee with a series of charts and tables designed to show them it's a myth that the company gets off easy paying taxes.

Irving executive Andrew Carson said the company has "the highest tax bill of any refinery outside Alberta" and is facing steep taxes on a number of fronts.

"New Brunswick is not a low-cost jurisdiction," Carson said. "We pay fairly high corporate income taxes, we have high personal income taxes, we have fairly high WorkSafe New Brunswick rates and we now have a fairly high carbon tax."

The legislature's law amendments committee is studying a motion by Saint John Harbour MLA Gerry Lowe to expand the assessment base and end or reduce exemptions.

Motion not binding

The plan already appears doomed. If passed by the full legislature, the motion is not binding on the Progressive Conservative government.

And Finance Minister Ernie Steeves declared yesterday that he has already made up his mind to oppose the measure. He said it would apply property taxes to farmers' tractors and ovens in pizzerias.


Miramichi Mayor Adam Lordon responded to that claim during his appearance at the committee Thursday.

"That is not the case," Lordon said on behalf of the Cities of New Brunswick Association. "That is not what we're advocating for. I always think it's important to have a debate on the facts rather than throwing misinformation into the mix as well."

Meanwhile, Saint John Mayor Don Darling pushed back at suggestions that floating the idea is anti-industry or anti-business.

He said it stems from a realization that the municipal tax structure hasn't changed since the Equal Opportunity reforms in the 1960s, when cities weren't playing as large a role in the economy.

"The legislation we're dealing with is decades and decades old,"he told reporters.

At the hearing, Darling repeated his call that the province hand over its portion of property tax revenue in the city to the municipality and eventually give it the power to tax industry directly.

Lower tax burden

Lowe's motion was inspired by a report prepared for Saint John city council in 2017 that examined taxing machinery and equipment.

The rookie MLA and former city councillor says the revenue would allow the city to lower the tax burden on residents, which might help slow the migration of city residents to neighbouring municipalities.


He has repeatedly cited the 800-acre Irving refinery as a potential source of new property tax revenue.

On Wednesday, Green Party Leader David Coon brought up a supposedly temporary 1980 law to exempt Irving's oil storage tanks from provincial property taxes, a measure still in place almost four decades later.

Carson said Thursday the exemption applies to only 10 per cent of the company's tanks at the refinery and its nearby Canaport facility.

"So the balance of our tanks [are] fully assessed, fully taxed municipally, provincially," he said. "They're not treated in a different way."

Carson urged the committee to take into account the company's other contributions to Saint John, including the property tax it pays on its other properties and its involvement in the community.

For the most part, Carson avoided being drawn into discussion about the Irving family's wealth. Lowe asked him about corporate profits and whether the refinery makes "good money" from all the oil-based products it sells.

But Carson avoided being pinned down.

"It would vary through the year, in all honesty," he replied. "There are generally times in the year when certain products are in higher demand."

Later in the morning, Coon challenged the refrain from various business groups about New Brunswick's high tax burden putting new investment in the province at risk.

'Unlikely to invest'

When Sheri Somerville of the Atlantic Chamber of Commerce said businesses in the province are already overtaxed, Coon pointed to a 2016 Conference Board of Canada report that said New Brunswick had the second-lowest corporate tax burden in the country.

She said there have been new costs since then, including the federal carbon tax, that makes business owners "uneasy" and unlikely to invest.

"Would you not agree that if we have a sub-standard health-care system, that would be a barrier to new investment, to attracting business to New Brunswick? Or if we have a substandard education system or, God forbid, both?"

Somerville answered by calling for a broader tax review.

"There is no one silver-bullet solution that we can apply," she said.
Lordon also called for a broad tax review, even though the eight cities he was representing aren't opposed to Lowe's proposal.

"We're in support of a perhaps higher level of taxation on equipment and machinery, but we don't think that is enough," he said. "It has to be about more than that. It's got to be a lot broader."

Lordon said cities are playing a greater role in the province, with 91 per cent of New Brunswickers living within 50 kilometres of a city but most of them not contributing through taxes to the cost of city services they use.

He said cities need taxation powers to match their growing role as "regional hubs."

Lowe's proposal "would be one very small piece of one very large and complex puzzle," Lordon said.

 "This is not going to create the broad systemic change that we desperately need in this province.

Looking at only one piece in any way is not going to be enough."