News release

Province Moves To Protect Jobs, Industry

Service Nova Scotia and Municipal Relations (Oct. 2000 - March 2014)

SERVICE N.S./MUNICIPAL RELATIONS--CXN--Province Moves To Protect Jobs, Industry


Keeping jobs and industry in Nova Scotia are the benefits from legislation introduced today, May 7, by Barry Barnet, Minister of Service Nova Scotia and Municipal Relations.

The Oil Refineries and Liquified Natural Gas Plants Municipal Taxation Act increases the property tax paid by the Imperial Oil refinery in Dartmouth by $1.4 million, for a total of $3.6 million this year, said Mr. Barnet. The increase would be new revenue to Halifax Regional Municipality (HRM), $1.4 million over and above what it received last year.

The minister said the legislation would also enable the province to establish the property tax for any future liquified natural gas plant. He added that his department would begin a thorough review of Nova Scotia's industrial assessment and taxation policy.

"Two decades ago, there were three oil refineries in Nova Scotia. Today, there is one and its future could be in doubt unless we act now," said Mr. Barnet. "The refinery employs about two hundred people in well-paying jobs and this legislation is about protecting these jobs."

Following a revaluation of the refinery and its property, the refinery's assessment increased from $70 million in 2003 to $191 million in 2004. Municipalities determine the tax bill by multiplying the assessment by the commercial tax rate.

Some time ago, refinery officials approached the province because of the increase in its municipal tax bill such a large increase in assessment would trigger. The officials said that, if Imperial's municipal tax bill increased by such a large amount, it could threaten the long-term survival of the refinery.

"Questions about this refinery's continuing operation have been well documented over the past decade," Mr. Barnet said. "Because of its size, its productivity is relatively low compared to other refineries. Its municipal tax bill, however, is completely out of whack compared to other refineries."

Under the new assessment, Imperial's property tax bill would have been the equivalent of $71 per barrel of capacity. This amount would be more than quadruple the amount paid by the much larger Irving refinery in Saint John, N.B., and the Ultramar refinery in Quebec. It would be more than six times the amount paid by a similar sized refinery in St. Clair, Ont.

"The municipal tax we are proposing today is the equivalent of $41 per barrel of capacity, and even that is much higher than competing refineries in eastern Canada," he said. "I am sensitive to the municipal concerns on this issue. However, this government will not stand by as a critical part of the province's infrastructure is threatened.

"Two-hundred Nova Scotians earn a very good living at this refinery. Its payroll of $23 million a year and its huge spin-off benefits could not be easily or quickly replaced.

"More than just jobs are at stake. This refinery is the only producer of gasoline, diesel and furnace oil in Nova Scotia. We've seen what is happening to gas prices. Nova Scotians can only lose if we become dependent on out-of-province or foreign suppliers of these vital commodities. This legislation is nothing more, and nothing less, than putting the economic interests of Nova Scotia first."

The minister added that there is precedence for government intervening to establish municipal tax revenues from large industrial accounts. In 2001, the province determined the municipal tax revenues from the Maritimes and Northeast gas pipeline.

He said that municipalities on their own sometimes make special tax deals with individual commercial properties, citing the Halifax Regional Municipality's deal with the Halifax Airport Authority.

"And on my desk is draft legislation, sent to me by HRM, proposing a municipal tax structure for the Heritage Gas pipelines," he said. "This proposed tax structure is also outside the strict rule of rate times assessment. It would also lead to significant tax savings to this energy company, compared to rate- times-assessment."

The minister said his department will conduct a review of the province's assessment and taxation policies of heavy industrial properties. "We cannot expect to lure new heavy industry, such as a liquified natural gas plant, to Nova Scotia if our property tax system discourages them from moving here," he said. "That is our long-term solution. In the short term, we must ensure that the amount of property tax being paid is fair to Imperial, fair to the municipality, and helps ensure Nova Scotia does not lose 200 jobs and an important part of our economy."