From: canadarevenue.agency@canada.com   
      
   Are the Irvings Canada's biggest corporate welfare bums? :CRA SOTW   
      
   By Bruce Livesey in News, Energy, Politics | March 30th 2017   
      
   â€œDo you see, it’s over there,â€� said Gerry Lowe, pointing out across the   
   cove as we stood on the shores of the Bay of Fundy on the outskirts of Saint   
   John, New Brunswick, gazing into the distance towards the Canaport LNG   
   terminal – its three    
   enormous grey concrete storage tanks and jetty just visible in the midday   
   gloom. It was a bitterly-cold overcast day in January of last year and Lowe, a   
   garrulous 73-year-old Saint John city councilor, was giving me a guided tour   
   of New Brunswick’s    
   largest city in his black Ford sedan. I’d come to this hardscrabble burgh to   
   research the Irvings – Canada’s seventh-richest family.   
      
   It was no accident Lowe had driven me out to have a look at the LNG terminal   
   â€“ which unloads natural gas from tankers that steam into Saint John’s   
   port. The terminal is at the center of a bitter dispute pitting the region’s   
   largest energy company,    
   Irving Oil Ltd., against Saint John’s city hall. In so doing, it’s become   
   a potent symbol of all the problems inherent with corporate welfare in Canada   
   â€“ and in New Brunswick especially.   
      
   Corporate welfare is often defined as grants, subsidies and even tax breaks or   
   incentives bestowed by governments on large corporations. The subject has been   
   in the news lately, in particular over the federal and Quebec governments’   
   decision to bail    
   out Bombardier Inc., the troubled Quebec-based aircraft manufacturer. As an   
   indicator of the sums involved, between 1961 and 2013, Industry Canada alone   
   handed out $22.4 billion to businesses.   
      
   In the case of the Canaport LNG terminal, the $1.2-billion facility was   
   conceived of more than a decade ago by Repsol, a Spanish energy company.   
   Repsol had come to New Brunswick seeking a place to offload natural gas to   
   import into the US market. The    
   land they wanted to build the terminal on is owned by Irving Oil, which is   
   controlled by Arthur Irving, an 87-year-old billionaire and one of Canada’s   
   10 richest men (total worth – US$3-billion). So Irving and Repsol formed a   
   joint-venture.   
      
   But in 2005, Irving Oil's then CEO, Kenneth Irving – Arthur’s oldest son   
   â€“ informed the mayor of Saint John that unless the city gave the company a   
   massive tax break on the land, the terminal would not be built.   
      
   The threat worked: the city agreed to cut the annual tax bill from   
   $8.1-million down to a mere $500,000 – for the next 25 years. In so doing,   
   the city was forsaking almost $200-million in tax revenue. The provincial   
   government then passed a bill    
   approving the tax concession. Meanwhile, the province itself had stopped   
   charging taxes on the land more than 10 years earlier.   
      
   However, in 2015, the CBC revealed that Repsol was paying Irving Oil (US)   
   $12.5-million a year in profits to rent the land – no matter how well the   
   Canaport LNG terminal was performing. Irving also receives profits from the   
   terminal itself. Outraged at    
   being misled by Irving Oil, the city demanded the New Brunswick government   
   tear up the tax break. Last summer, the province finally relented.   
      
   Saint John desperately needs the cash. “I would like to see [the Irvings]   
   pay their fair share,â€� Lowe told me, pointing out the city struggles to pay   
   wage increases for its workers. In fact, by last year, the city was facing a   
   $76-million pension    
   shortfall.   
      
   But Saint John’s victory was short-lived. Without formally informing the   
   city, the provincial government hired Nationwide Consulting Company Inc., an   
   obscure New Jersey-based tax assessment company with a record of helping oil   
   companies like Exxon    
   Mobil, BP, Chevron Texaco and Shell lower their tax burden. Nationwide was   
   asked to conduct a new assessment on the land where the LNG terminal stands.   
   For years, the property and the terminal were valued at $300-million. But last   
   month, Nationwide told    
   the city the site was now worth only $98-million. “I don’t think it’s an   
   accident,â€� says Lowe. “I think the province was quite worried.â€�   
      
   Thus, instead of getting $8.1-million, the city will now receive only   
   $2.6-million in taxes from the property. And even that’s not assured if   
   Irving Oil appeals the new assessment; they could pay even less.   
      
   To many who’ve watched this drama unfold, it follows an all too-familiar   
   pattern of federal, provincial and municipal governments dishing out vast sums   
   in subsidies, grants, tax breaks and loan guarantees to the Irvings and their   
   armada of companies. †  
   œWhat Irving is doing is tunneling out the state and leaving nothing left   
   behind,â€� remarks Donald Bowser, an international anti-corruption consultant   
   who lives in Nova Scotia. “Irving is one of the most subsidized companies   
   around.â€�   
      
   Which begs the question: are the Irvings the biggest corporate welfare bums in   
   Canada?   
      
   Privately-held, the Irving companies receive huge sums from taxpayers   
   The answer is simple: it’s impossible to find out. That's because the Irving   
   companies are all privately held, meaning they don’t have to reveal any   
   financial information to the public - including how much they receive in   
   government handouts, earn in    
   profits, pay in taxes or invest. They also don't pay out dividends to   
   shareholders - only members of the Irving family presumably receive the wealth.   
      
   â€œAt least with a publicly-held company there is certain information in the   
   marketplace where you can piece things together,â€� says Aaron Wudrick,   
   federal director of the Ottawa-based Canadian Taxpayers Federation (CTF),   
   which opposes corporate welfare.   
    “If Irving is private, we have no idea what is going on, with no real   
   public indicator, and I think just optically it’s even worse for government.   
   You have an extremely wealthy, powerful family that is directly benefiting   
   from average people’s    
   taxes. I think that is scandalous. And again it feeds into public cynicism   
   about corporate power in bed with government – and I think that’s a very   
   bad thing.â€�   
      
      
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