Premier Brian Gallant says he was "surprised" by how much the property tax assessment on the Canaport LNG site in Saint John dropped after a reassessment by a U.S. company hired by the province.
The government's property tax assessment department slashed the appraised value of the property on the city's east side by nearly $202 million for 2017, the first year Irving Oil is scheduled to pay full taxes on the site to the city after the government repealed its longstanding tax deal.
The 67 per cent reduction, based on the recommendation of Nationwide Consulting Company Inc., saves Irving Oil about $5.5 million in property taxes it would have owed the city under last year's valuation. Instead of paying $8 million, the company will owe the city $2.6 million.
Gallant told reporters Friday he was not involved in choosing the consultant, which has a long list of oil and chemical companies it has helped with property valuation issues as clients.
He also couldn't say who chose Nationwide Consulting, or why. "I'm not in a position to tell you because I really don't know," said Gallant.
"What I can tell you is that Service New Brunswick does not have the expertise to be able to evaluate the value of such a property. As you can imagine, I mean, an LNG terminal is a very unique and complex piece of property and capital building," he said.
"So I do applaud the fact that Service New Brunswick recognized that and tried to find an outside consultant that would be bringing some type of expertise to the table."
Everyone "suspected the property was overvalued," the premier said. "The city of Saint John knew that that was a potential outcome.
"I think everybody is surprised, as am I, that it went down as much as it did."
The new assessment of $98 million, down from last year's $299.5 million, is the largest ever single-year reduction in the assessed value of a property in New Brunswick.
Still, Gallant stressed Saint John will receive more in property taxes this year because late last year, the province terminated a decade-old deal that had frozen the LNG terminal's property taxes at $500,000 a year.
New Brunswick government tender documents show the province issued a public request for proposals last September to provide "external expertise" for a comprehensive assessment of the LNG property.
Stephen War, the province's director of property valuation, said he's not sure how many companies responded to the request, but only Nationwide Consulting from Glen Rock, N.J., was given serious consideration.
"Basically, it boiled down to one company and it was Nationwide who we felt could provide the product for us that we needed."