03/08/2012 01:45 EST | Updated 05/08/2012 05:12 EDT

Nova Scotia premier defends tax break for Halifax oil refinery as a job saver

HALIFAX - Premier Darrell Dexter says a new tax deal for an Imperial Oil refinery in Halifax is needed to help Nova Scotia keep its last refinery.

The province has extended a deal on the refinery for another five years that will see the city get $3.6 million annually from the refinery in property taxes, as well as $450,000 in two instalments to be paid in April and in 2014.

Without the tax break, local media reports say Imperial Oil (TSX:IMO) would be facing a $7.1 million tax bill.

Dexter says his government is extending a deal negotiated by a former Conservative government.

The refinery, which sits on the Halifax harbour, employs about 200 people.

The government says it supplies a majority of the province's fuel.

Dexter says the refinery is important to the provincial economy and is one of the highest taxed refineries in the country.

"In fact, it's the highest taxed refinery, I think, east of Manitoba," he said Thursday outside a cabinet meeting.

"It is a refinery that is under a great deal of stress in terms of its continued operations. We used to have three refineries in this province, now we have one. I don't think anyone would want to see us lose our last refinery."