Municipalities throughout New Brunswick may soon be able to set special property tax rates for heavy industry.
Proposed legislation introduced Tuesday would pave the way for a new heavy industrial classification of property.
“This is a positive step forward,” David Hickey, a city councillor in Saint John, said in an interview on Wednesday.
Saint John and other municipalities have been pushing for legislation like this for several years as part of comprehensive tax reform.
Currently, the tax rate for non-residential properties is automatically set at 1.5 times the residential rate.
With these changes, governments could set a heavy industry rate of 1.4 to 1.7 times the residential rate. Municipalities could also set a separate tax rate for other non-residential properties within that range.
Hickey said while the legislation is a step in the right direction, he was hoping for a wider range for municipalities to choose from.
“It could have given more flexibility to municipalities, and certainly that was our request,” the city councillor said.
On Wednesday, the city said that it will not know the exact financial implications until it receives the heavy industry property assessment data from the province.
Hickey said an early analysis suggests the city could receive an additional $1.6 million in much-needed revenue each year.
“It’s certainly a contribution but it’s a contribution that isn’t as significant as we would have hoped,” he said.
“That being said, the city is in a good enough position that we’ve seen significant growth over the last few years, we handled our finances in a way that has put them on a sustainable track, we’re able to start reinvesting in the community.”
If approved, the legislative amendments would take effect in time for the 2023 property taxation year.
Brent Harris, a councillor at large for the city, said he is also glad to see this legislation come forward.
“This bill finally brings financial decision making capacity to the local level; where it belongs,” Harris said in a tweet on Tuesday.
Former mayor Don Darling, who championed comprehensive tax reform during his time in office, believes the new legislation does not go far enough.
In a tweet on Wednesday, Darling pointed to estimates from two years ago which showed heavy industry paid just $12 million of the $128 million in property tax received by the city.
“Another 1.5 million dollars is not tax fairness and doesn’t come close to meeting the promises made by the Premier and MLA’s,” Darling said in his tweet, referring to the three-part Sustaining Saint John plan released in 2019.
The proposed legislation is just one part of the more comprehensive tax reform the city has been pushing for.
Other items include more equitable distribution of the property tax levy and repealing property tax exemptions for heavy machinery and equipment.
