Mayor touts tax relief for city and new owner of Stephenville Airport asks for relief

Stephenville Dymond International Airport, purchased last summer by an entrepreneur who promised to build giant futuristic drones and create hundreds of jobs, is currently negotiating with the city council to reduce a high tax burden.

The Ottawa-based Dymond Group, which has owned the airport in western Newfoundland since last August, hopes to pay the town of Stephenville a grant in lieu of taxes – a payment that would represent only a fraction of the annual tax revenue touted by Stephenville Mayor Tom Rose.

In 2022 and early 2023 – when the deal was still pending – Rose indicated several times that the city would collect about a quarter of a million dollars in taxes annually after the airport was sold.

However, in an interview with Radio-Canada last week, Rose said: “With large infrastructure projects like ports and airports, it is usually the case that you get subsidies rather than taxes, rather than full taxation.”

Rose said the tax reimbursement is expected to be between $50,000 and $100,000 per year. He added that there are similar agreements with other airports in the province. Negotiations are scheduled for later this month, he said.

Lew Short, CEO of Stephenville Dymond International Airport, said the airport has submitted a proposal to the city but declined to provide further details.

Tax relief would help modernize the airport, says CEO

“I think a lot of people have a misconception about this whole process,” Short said. “We’re basically applying for a tax break. That tax break allows us to invest more in infrastructure because we’re improving the airport’s infrastructure.”

How long the tax relief will last is at the city’s discretion, Short said.

Rose said the grant would be renegotiated over time.

“If a company comes and says, ‘We’re going to raise this capital, we need to expand the airport, we need to attract airlines,’ then we need to get things moving.”

Stephenville Mayor Tom Rose says talks are underway to allow the airport’s new owners to pay the city a subsidy in lieu of taxes. (Patrick Butler/Radio-Canada)

The mayor pointed to Deer Lake as a precedent for such an arrangement, saying that the city council there only receives a grant of $50,000 per year.

Rose said the council would vote publicly on any deal.

Stephenville has struggled to maintain scheduled flights for years. Currently, no airline offers regular service. The city council pumped significant tax money into the airport in the past – before the new owners took over – to keep operations afloat.

Short said there are currently about 15 people working at the airport, clearing the runways and maintaining the building for the few medical and private flights that land at the sleepy facility. Inside the terminal, former car rental counters have been converted into a showcase for local taxidermy.

Short said work is underway to upgrade the airport’s lighting and that all employees received a $10-an-hour raise following Dymond’s takeover.

Scheduled passenger services until the end of the year?

Last month, the new owners said scheduled services would resume by the end of 2024. Short said discussions were underway with airlines but declined to provide further details.

Dymond has promised to build a state-of-the-art manufacturing facility where his company will manufacture 25-meter-long drones. He has also promised to create hundreds of jobs and hundreds of millions in investment with money from the private sector.

Short said he would not comment on drone production plans.

Lew Short, CEO of Stephenville Dymond International Airport, said the airport has made a proposal to the city but declined to provide further details. (Patrick Butler/Radio-Canada)

“My focus today is to get this airport up and running, and I haven’t had those conversations with Mr. Dymond yet,” he said. “My focus is to get this place ready for traffic and scheduled flights and then move forward.”

Rose told Radio-Canada last week that the former Stephenville paper mill, which was closed by Abitibi Consolidated in 2005, also paid a subsidy in lieu of taxes and that World Energy’s GH2 wind-to-hydrogen-to-ammonia project would receive a similar tax break.

“When World Energy gets the hydrogen plant up and running, starts shipping ammonia and making money, we will negotiate with World Energy a subsidy in lieu of taxes for the port and the hydrogen plant, just like we would with the airport,” Rose said.

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