03 September 2013

Province chops tax breaks for two companies #nlpoli

On August 1, the provincial cabinet revoked tax breaks granted to two companies in the province under the Economic Development and Growth Enterprises (EDGE) program.

Order-in-Council 2013-218 states that cabinet took the decision “due to the companies not meeting a term or condition to which the incentives are subject.”  The two companies are:

  • Newlab Clinical Research Inc., and,
  • Gander Aerospace Manufacturing.

The order in council doesn’t indicate what term or condition the companies failed to meet.

Newlab Clinical Research Inc. is a St. John’s company. Newlab received EDGE status in September, 2000.   According to a news release in 2000,

Companies meeting EDGE criteria are eligible for a 10-year tax break from provincial corporate income tax and provincial payroll tax, followed by a five year phase-in of these taxes, unserviced Crown land for a nominal fee, and access to a facilitator who will help obtain the required permits and licences associated with start up or expansion. In addition, many of the province’s municipalities participate in the EDGE program and offer similar tax holidays from property and/or business tax.

According to the terms of the EDGE Act, the company should have completed the initial 10 year tax holiday.  It should now have been part way through the period during which the remission of provincial tax decreased by 20% per year.

In 2007, the provincial government bought shares in the company as part of an unannounced cash injection into Newlab and several others.

According to figures available from the province’s Chief Electoral Office, Newlab Clinical Research made political contributions to the provincial Conservative Party totalling $21,150 between 2003 and 2011.  The company made a total of $14,000 in political contributions to the Conservatives  in the three years from 2009 to 2011. 

Gander Aerospace Manufacturing is the other company to lose its EDGE designation, granted initially in 2003.  Under the EDGE Act,  Gander Aerospace was supposed to be in its initial tax holiday period of “15 years for companies that establish or expand outside the Northeast Avalon region.”