Property tax assessment for Irving paper mill in Saint John among lowest in Canada

Service New Brunswick's recent decision to retract $3.5 million of a $3.7 million assessment increase it had given J.D. Irving Ltd.'s Saint John paper mill in 2021 for economic reasons is the third major valuation reduction the facility has gotten from the agency in the last decade.

The provincial body is not saying much about how it came to that decision, citing "assessment market analysis" it does annually, but the cumulative effect of reductions since 2012 has left the mill with one of the lower property tax valuations in the country for its size. 

That has eroded the amount of tax the mill pays to  Saint John  — from $1.58 million in 2012 to $670,000 this year — and Mayor Donna Reardon said there is little the city can do but hope Service New Brunswick has been valuing the property in a reasonable way.

"I don't know how they figure it out," said Reardon in an interview.

"It would be interesting to look across the country and see how assessments [on mills] are done."

Irving Paper is New Brunswick's largest forestry mill, with an annual production capacity of 410,000 tonnes of specialty paper. 

According to the company's current "sustainability report," production levels have been strong in recent years, with 388,974 tonnes of paper manufactured in 2021, just under 95 per cent of full output.

Still, for 2023 the mill is assessed for taxes to be worth $24.3 million, 41 per cent of what its taxable value was back in 2012. 

Last week the company said that ongoing devaluation is justified "given economic challenges in the paper industry, including consumers' growing reliance on screens over paper."

But not every province adjusts the assessment value of business properties based on market up and downs.

In Powell River, B.C., the Catalyst paper mill also produces specialty paper and has an annual production capacity of 330,000 tonnes. It, too, has been facing significant problems but is valued for property taxes in 2023 to be worth $124.5 million.

In December 2021, the mill's owner, Paper Excellence, announced that "ongoing contraction of global paper markets and paper prices" had been causing the mill to lose money and was forcing a shutdown. 

The mill hasn't operated for more than a year because of that, but has still retained its assessed value and this year is scheduled to pay $3.3 million in property tax, mostly to Powell River.

In an email, BC Assessment's Tim Morrison said the agency "must strictly follow" rules set in regulation, and those don't include provisions for helping a mill financially through the assessment system by lowering its taxable value.