After 42 years, Irving Oil property-tax exemption comes to mysterious end

A property tax exemption that New Brunswick granted Irving Oil 42 years ago on its coastal crude-oil terminal in Saint John appears to have ended, at least temporarily, although exactly what killed it is not clear.

The Department of Finance referred questions about the change to Service New Brunswick, but Service New Brunswick said it cannot comment on what happened.

"We are unable to discuss individual accounts," Jennifer Vienneau, Service New Brunswick's director of communications, wrote in an email about the terminal's new tax status.

Vienneau said information about a change in the oil terminal's tax treatment would have to come from the "property owner." 

Irving Oil, however, did not respond to a request for information.

The revoked tax exemption is related to Canaport, a large crude-oil tank farm owned by Irving Oil on Mispec Point, at the edge of the Bay of Fundy. 

The facility has a storage capacity of six million barrels and supplies Irving Oil's Saint John refinery from shipments it receives from ocean-going tankers that arrive from around the world multiple times every month. 

The tank farm and related infrastructure cover 430 hectares of land and sea floor in the east end of the city and is assessed for taxes by Service New Brunswick to be worth $30.2 million. 

It has always had to pay full municipal property taxes to Saint John, but since 1981 it has been one of a handful of New Brunswick business properties exempt from paying any provincial property tax. 

The concession was granted by the former government of Richard Hatfield to help Irving Oil weather the 1979 oil crisis that saw crude prices spike and North American demand for petroleum products crater in response.

The oil crisis eventually passed and consumer demand returned, but the New Brunswick tax concession has continued on decades later.

In its most recent annual tax expenditure report, New Brunswick's Department of Finance valued the exemption in 2021 to be worth $674,929. Over 42 years it has saved Irving Oil more than $20 million in property tax on the location.

The "objective" of the exemption, according to the Department of Finance, is "to support the competitiveness of infrastructure that is important to economic development."

But according to updated New Brunswick property records, the crude-oil tank farm has been switched from its longtime status as "provincial rate excluded" to "fully taxable" for 2023.