New Brunswick

MLAs question why Irving Oil excluded information from presentation

MLAs did not notice missing information during half hour presentation

Posted: September 13, 2019
Last Updated: September 13, 2019

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 was one of a number of companies and business groups appearing before the legislature's law amendments committee last week to argue against expanding property tax assessments on New Brunswick industries that would serve to raise their property tax bills.

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.  

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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 on the facility's capacity of 320,000 barrels per day.

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. 

In Saskatchewan, the Co-Op refinery in Regina pays a property tax equal to $38 per barrel on its daily capacity, nearly double the rate Irving Oil pays in Saint John.  

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.

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"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.

Lowe said that may be the case but he would prefer all information be made available for MLAs to consider, without exclusions.

"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.