Municipal leaders throughout New Brunswick believe a plan for municipal tax reform is a critical issue in next month’s provincial election.
They say the laws need to be updated to allow towns and cities to keep more of the money they generate.
Saint John Mayor Don Darling has advocated for tax reform for several years. He said municipal tax laws in New Brunswick are more than 60 years old and were designed to benefit rural areas more than urban centres.
His city had to eliminate $10 million in salaries and services to balance a budget for 2021, including cuts to fire and police.
He said the province keeps millions of dollars in tax money that it collects from its cities – about $30 million from Saint John alone – and he said New Brunswick is the only province in Canada that does it.
“The role of a provincial government in every other province in the country, they generate their revenue from things like employment tax and sales tax and that they leave the property tax as a mechanism of revenue for municipalities,” Darling said. “Simply put, that’s what we’re asking for.”
Darling wrote letters to each of the provincial party leaders, inviting them to a meeting of Saint John Common Council to make their pitch on municipal tax reform. As of earlier this week, none had accepted the offer.
Saint John is one of eight cities that make up the Cities of New Brunswick Association. The group created a wish list for the 2018 provincial election.
Association president Adam Lordon, the mayor of Miramichi, said it is fine-tuning that document to present it again for 2020.
He said the province needs a regional approach to the tax system, where residents who live in local service districts, known as LSDs, who use roads and recreational facilities in their area, contribute more equally to their costs.
“Right now, that imbalance is there,” Lordon said. “And what it means is that people who live in incorporated communities — cities, towns and villages — are effectively paying more tax to subsidize those who live in LSDs who aren’t paying enough.”
The Canadian Taxpayers Federation agrees tax reform is necessary, but not in the way cities would like.
Interim Atlantic director Renaud Brossard said people and businesses have lost a lot of money during the COVID-19 pandemic, and asking them to dig deeper now is wrong.
“Looking for new ways to tax people, looking for new ways to increase the costs on said people, is not the way to go,” Brossard said.
Many political parties say some type of reform is needed.
The previous Progressive Conservative government had committed to tax reform in time for the 2023 fiscal year and leader Blaine Higgs renewed that commitment this week.
“We need to embrace cities,” Higgs said. “We need to embrace municipalities, so to do what they need to do, to be able to support them in what they need to do to be successful.”
“We are committed to stay on that timeline. We are committed to supporting municipalities and we are committed to tax reform in those areas because we must.”
“We recognize the importance of working together with municipalities and municipal organizations to meet the challenges they have in raising the revenues they need to provide the services that fall under their jurisdictions,” said Liberal Leader Kevin Vickers in an email to Global News. “We are committed to municipal tax reform and will announce the details of our plan in the days ahead.”
Green Party Leader David Coon said part of his party’s plan is to tax heavy industry.
“We think cities should have more authority, our municipalities should have more authority and the ability to access the revenue to carry out those responsibilities,” said Coon. “They shouldn’t be treated as simply an offshoot of the provincial government.”
People’s Alliance Leader Kris Austin said his party would eliminate the so-called “double-tax” of property owners in New Brunswick as part of his reform plan.
“We would invoke municipal tax reform to allow municipalities to have tax classes,” Austin said. “That way they can set rates based on residential, industrial, commercial, possibly have heavy machinery in there, and each municipality can set their own rates to bring in their own revenue.”
Interim NDP Leader MacKenzie Thomason said loopholes in the current tax system need to be closed.
“Municipalities need to be able to do the work they have to do,” Thomason said. “But, I think the conversation is not what the province needs to do, for municipalities, specifically, but that they need to enforce the taxation that is already needed and stop letting people dodge through loopholes.”