Concerns from New Brunswick’s manufacturing sector over upcoming property tax changes in the province.
New legislation, which received Royal Assent on Friday, would pave the way for a new heavy industrial classification of property.
Ron Marcolin, divisional vice-president of Canadian Manufacturers and Exporters, said it will create a competitive disadvantage for companies.
“The sad reality is that New Brunswick is a very highly taxed jurisdiction and a very high-cost place to do business. Any increased cost pressure, whether its taxation or otherwise, is going to hurt, not help,” Marcolin said in an interview.
Municipalities around the province 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.
In a previous interview, Saint John councillor David Hickey said an early analysis suggests the city could receive an additional $1.6 million in revenue each year by raising the tax rate for heavy industry.
Marcolin, however, said municipalities should actually consider lowering the tax rate, not increasing it.
“If they were to lower the rate, it would actually introduce the option for new businesses to come to the province, which all of us obviously require. We want a fulsome tax base for the variety of social services that we have,” he said.
Marcolin said New Brunswickers have to realize that the province needs to be competitive on taxation and other costs.
