As local governance reforms continue to advance to meet the rapidly approaching January 2023 deadline for implementation of the strategic restructuring of local government entities, statements of public interest for land use planning, and property taxation adjustments it is becoming evident that there are real implications for private landowners and for industries. An impracticable draft by-law intended to ban clearcutting within the Municipality of Miramichi is case-in-point that municipal and local governance and land use planning requires careful consideration with appropriate input from stakeholders, and an eye to regional and provincial economic implications.
Another area receiving a lot of attention in recent weeks is the that of property taxation reform. The White Paper released by Environment & Local Government outlines the property taxation reforms that will be implemented by 2023, including local rate flexibility on non-residential (business) properties. Bill 117 expands the existing non-residential property tax rate from 1.5 times the residential rate to a range between 1.4 and 1.7 times the residential rate. New Brunswick businesses are already subject to the highest provincial and education property tax rates in Canada, according to data prepared and presented to the provincial Standing Committee on Law Amendments in September 2019. Additionally, Bill 117 replaces the term “non-residential property” with two new categories of “heavy industrial property” and “all other real property except residential property”, effectively decoupling heavy industry from other non-residential businesses.
The fact is commercial and industrial property taxes already subsidize the services residential customers receive, as evidenced by numerous Canadian studies over the last few decades and reviewed in the 2017 Kitchen and?Slack report on municipal property taxes?commissioned by the City of Saint John. Non-residential properties (including Heavy Industry) are subject to the provincial portion of property taxation, currently equal to $1.685 per $100 of assessed value. Owner-occupied residential properties up to 0.5 hectare are exempt from the provincial portion of property taxes and pay only the local property tax rate. Each municipality sets its own municipal property tax rate and non-residential municipal tax rate multiplier will be 1.4 to 1.7 times the residential municipal tax rate and non-residential (commercial/business) properties must pay the municipal rate in addition to the provincial rate.
A June 9th article in the Telegraph Journal highlighted Government’s recently introduced a tax cap for commercial properties including the new “Heavy Industrial” classification if those businesses qualify for the tax relief. Commentary in the article that suggests the tax cap is “once again prioritizing the well-being of heavy industry, which continues to be subsidized by the average hardworking taxpayer in New Brunswick”, is simply untrue. The tax cap will enable businesses to remain competitive and perhaps even invest in expansion or modernization of operations – and that’s good news for municipalities and citizens alike.
The province is attempting to ease the tax burden on all parties – residential and non-residential – and has given municipalities an opportunity to be flexible and creative with their revenue streams. Recognizing the contributions that existing commercial and heavy industrial businesses make to their communities is key to municipal economic growth. Municipalities can take this opportunity to show that their communities are “open for business” and seeking investments and jobs from existing and new companies and businesses.
Executive Director of Forest NB