Irving Shipbuilding Statement Regarding Property Tax Agreement with Halifax Regional Municipality
HALIFAX, N.S. We appreciate Council’s support at today’s meeting. We know there are still procedural issues to be dealt with and respect the process. The Mayor was committed to a transparent discussion and we support this.
With this tax agreement, the projected property taxes will double by 2020 and quadruple by 2024 from current levels.
The property tax proposal is the result of a collaborative effort with HRM, and recognizes the unique nature of the shipyard property and the economic opportunities ahead.
Fairly taxing a specialized manufacturing facility like a shipyard is a unique challenge. A single purpose facility like a shipyard does not frequently transfer on the open market and therefore it is very difficult to estimate “market value” for property tax purposes.
This agreement provides certainty of how property tax revenue will be determined for the City and certainty of costs to Irving Shipbuilding. The formula for calculating property taxes provides a clear and objective method to determine property taxes in each year which is fundamentally based on paying higher property taxes as utilization of the facility increases, and reducing taxes when utilization decreases.
The agreement benefits HRM with growing tax revenue while recognizing the significant front-end investment and long-term development required at Halifax Shipyard. The cost certainty is critical to ISI as we work to deliver best value to Canada and bid future projects.
We understand that this type of agreement is not unique. Tax agreements are in place with the Halifax airport and Imperial Oil Refinery and cover certain activities such as Wind Farms and Natural Gas Transmission Lines.
Irving Shipbuilding built a larger facility than what is required for the AOPS ships. We did this to ensure a seamless transition for workers and operations into the building of the Canadian Surface Combatant (CSC) ships.
Halifax Shipyard will continue to contribute growing property tax revenues to HRM in addition to the increased taxes/revenues (property and consumer spending) generated by the projected growth in our workforce, of which more than 80% currently live within HRM boundaries.
Many HRM based contractors make up the bulk of almost $300M in NS spending to date on NSPS and the modernization of the shipyard. This has a positive impact on local jobs and consumer spending within Metro.
Contact: Mary Keith
Vice President Communications
Office: (506) 632-5122 Cell: (506) 650-8209