By Scott Roblin

City vying for Methanex expansion project in Medicine Hat

Mar 5, 2018 | 4:29 PM

MEDICINE HAT, AB – A week after the Notley government tabbed Medicine Hat as a potential petrochemical hot spot, the City is pushing Methanex to keep that in mind.

Last week, the Vancouver-based company petitioned the school board in Geismar, Louisiana to take advantage of up to $100 million in property tax exemptions to expand the facility there.

All state tax bodies must agree to the exemption for it to move forward, which would free Methanex from property taxes for the first five years, and at a reduced 20 percent rate for the following three years.

Mayor Ted Clugston said they can’t match that, but said they’re still trying to sway the methanol producing giant.

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“We’ve basically made it clear to anybody that if they want to increase their production, not just Methanex but Canadian Fertilizer or a new company, that we pretty much give them electricity at cost for 10 years.”

Methanex is looking into expanding their operations in Louisiana or their current facility in Medicine Hat.

Executive Director of the Medicine Hat and District Chamber of Commerce Lisa Kowalchuk said it’s a competitive market for these companies, and the City of Medicine Hat needs to do all it can to attract them.

“Local governments can cancel, differ, refund taxes for example,” said Kowalchuk. “So, property tax adjustments are something that we’ve asked for within that policy.”

According to Clugston though, municipal property tax breaks don’t create much of an impact for most major companies.

“Often their largest input could be electricity costs, gas, or personnel,” said Clugston. “And, the property tax is just one tiny piece of the puzzle.”

CHAT News reached out to Methanex on Monday for comment, however they did not return our calls by deadline.

Kowalchuk said more needs to be done on both the provincial and municipal levels.

“We have to ensure that our tax environment and our tax regulation is competitive,” she said. “Particularly, when our closest neighbour within the US jurisdiction is making some of those significant changes.”

In the past, the City has looked to the province for assistance in providing incentives for these large-scale companies.

However, Clugston said not much has been given over the years.

“We have tried to bring the province in, we’ve had limited success with the province,” he said. “Not just the NDP government, but the previous one as well.”

Energy Minister Marg McCuaig-Boyd responded to the Methanex topic and energy diversification in the province through a statement on Monday.

“Our vision is to secure Alberta’s future by diversifying our energy sector and building on our strengths. This is the same vision Premier Lougheed had for Alberta and we’re proud to move that vision closer to reality.”

“We believe Medicine Hat has great potential for further downstream development and value-added processing jobs as one of four industrial clusters identified by the Energy Diversification Advisory Committee. Upgrading our raw resources into higher-value products will open new markets, create jobs and ensure Albertans get top dollar for our resources.”

“We will have more to say on specific energy diversification initiatives in the coming weeks.”

As for Rachel Notley, she was quoted last week as saying, “We don’t need to sit on the sideline and watch places like Louisiana eat our lunch.”

Clugston said he’s been in talks with Methanex since the meeting in Louisiana and he’s still confident in the City’s partnership with the producer.

“I would say that Methanex would absolutely agree that they would not say the City of Medicine Hat is what’s holding them back from expanding.”

Deciding between the Louisiana and Medicine Hat sites, Methanex planning to have shovels in the ground for expansion in 2019, with a potential operating date of 2023.