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Newfoundland and Labrador government thaws iceberg tax

On Monday, a local fishing boat gets in for a closer look at the icebergs that are in Fleur de Lys harbour on the Baie Verte Peninsula.
The provincial government has decided to drop a controversial tax on companies that use iceberg water.

Another Budget 2016 tax reversal means a break for breweries

ST. JOHN'S, N.L. —

Two years after introducing a tax on icebergs, the provincial government has officially changed its course.

In the 2016 budget, among the taxes and fees introduced by the newly elected Liberal government, companies had to pay a $2,500 to $5,000 minimum annual water fee on top of a $4,000 water license fee. The fees were paid by companies who made use of surface, ground, or iceberg water for consumption.

Small businesses such as breweries and wineries were primarily affected by the extra fee.

A cabinet order dated July 26 has overturned the minimum annual water fee, meaning companies will pay only for the water they use, at a price of $500 per 1,000 cubic meters of water used.

Environment Minister Andrew Parsons says there was immediate pushback on the move from small-business owners. He says the change shows government is willing to listen to small business.

“This doesn’t relate to a tremendous number of businesses, but they’re small businesses contributing to the economy. We think we’re making it easier,” said Parsons.“It wasn’t until businesses came forward and expressed their concern that we were able to sit back and see unintended impacts. When the department at the time heard about it, instead of saying sorry we’re not concerned, we sat back and said let’s look at what we’re dealing with here.”

Then-environment minister Eddie Joyce told local breweries on June 2017 that government would explore ways to reduce or remove the extra fee. Now, it has been eliminated.

Parsons says government will explore refunding businesses who had to pay the fees.

“Once the reversals happen there will be an assessment of what has been paid in and we’re working on finding a fairness there,” said Parsons.

“That’s something we don’t have an issue with.”

The changes are yet another reversal of tax and fees introduced in the 2016 provincial budget.

In January, the controversial tax of books in the province was officially reversed.

In the 2018 budget, government announced a five per cent decrease in automobile insurance tax, to be lowered by one per cent a year over the next five years.

The temporary deficit reduction levy was the first controversial measure to change from the 2016 budget. Originally, those with an annual income of $20,000 had to pay, but a month after being introduced, a suspension of monthly payments on provincial equalization allowed the threshold to be raised to those with incomes over $50,000.

Twitter: DavidMaherNL

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