Irving Oil had $250-million profit when it won tax break from city and province
CBC
Irving Oil raked in a quarter of a billion dollars in profits in the same year it persuaded Saint John city council and the New Brunswick government to hand it a 25-year tax break, leaked documents show.
The company made $250.7 million in 2005, a year in which Saint John capped Canaport LNG's property tax bill at $500,000.
The cost to the city was estimated at $112 million over a quarter-century.
The tax break required special provincial legislation, which Bernard Lord's Progressive Conservative government passed later in 2005.
The huge profits were not known publicly, and Kenneth Irving, CEO of Irving Oil at the time, argued the tax break was make-or-break for the LNG project.
"Companies are putting a lot of money at risk," he told the Telegraph-Journal newspaper in 2005.
"They have to be sure they are landing on the right beach when they are investing this kind of capital."
The tax break was repealed in 2016, and Irving Oil sold its ownership stake in the terminal to its partner, the Spanish energy company Repsol, last year.
The confidential Irving financial records show the oil company was such a resilient money-maker from 2005 to 2009 that it managed to turn a healthy profit even during the darkest days of the global economic crash in 2008.
The company has "demonstrated an ability to maintain attractive margins and profitability, notwithstanding the cyclical nature of the refining and marketing business," London tax and trust lawyer Andrew Hine wrote in a leaked 2010 affidavit filed in court in Bermuda.
The 2008 crisis saw major U.S. banks collapse and the price of a barrel of oil plunge from $140 in June 2008 to less than $40 in December.
Even so, Irving Oil recorded a $111.2 million profit.
Its debt-to-total-capitalization ratio — a measure of what it owes compared to the value of what it owns — also continued to improve during the financial turmoil of 2008.
The figures come from a confidential "private placement memorandum" the company used to borrow $150 million on financial markets in 2009. It includes five years' worth of detailed financial data on the company.
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