Proposed N.B. legislation creates separate tax rate for industrial sites

Proposed legislation in New Brunswick would establish a new heavy industrial classification of property for tax purposes.

By separating the category from the broad definition of a non-residential property, governments would have the ability to establish a tax rate solely used for large industrial sites.

Finance Minister Ernie Steeves introduced An Act Respecting Heavy Industrial Property in the legislature Tuesday.

According to the legislation, the definition of heavy industrial property covers pulp and paper mills, some sawmills, mines, oil refineries and many other significant facilities.

Through the bill, local governments will have the ability to tax large industrial sites between 1.4 and 1.7 times the residential rate.

Currently, the non-residential tax rate, which applies to all businesses, is 1.5 times the residential rate.

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Speaking to reporters on Wednesday, New Brunswick Premier Blaine Higgs said these changes are meant to provide more flexibility.

In the past, municipalities have found themselves in a bind when setting the tax rate, forced to impose the same rate on businesses of all sizes.

“We want the ability to have smaller businesses to have more of a tax break so they invest in the communities and they keep growing, and it’s not so important to a big business,” Higgs remarked.

Establishing a separate classification for heavy industrial properties checks off an action item long demanded by officials in the city of Saint John who seek comprehensive tax reform.

Saint John Mayor Donna Reardon acknowledged that the proposed bill was only an introduction, but said she’s pleased to see it move forward.

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“The tax classes give us some flexibility, a small bit of autonomy. It’s not a huge range, it’s 1.4 to 1.7, so the province still has significant control over it as well,” said Reardon.

Additional flexibility, she said, could be used to mitigate the impact of living surrounded by large industry.

However, proposed changes to separate heavy industrial properties could be negated if a new process for property assessments is not introduced.

Officials in Saint John, including city councillor Gerry Lowe, have advocated for the region to be assessed fairly.

“If the assessment stays the same as today, it probably means (an additional) $1.5 million, $1.6 (million) to us, but that could change. If the assessment on the big industry goes down, then it eliminates the $1.6 (million). If it goes up, it could be more,” said Lowe.

Both Reardon and Lowe recognized that next steps must include revisions to create a fair tax assessment system in order for changes to work.

Proposed changes on the heavy industrial properties would take effect in the 2023 taxation year.