Advertisement

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

Click to play video: 'Saint John closer to creating tax for industrial sites' Saint John closer to creating tax for industrial sites
Recently introduced provincial legislation paves the way for local governments to create a separate tax rate on heavy industrial sites. It marks a significant step forward in Saint John, where officials been lobbying for years for comprehensive tax reform. Robert Lothian has the story – Jun 1, 2022

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.

Read more: New Brunswick tables $11B budget with small surplus and tax relief

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.

Story continues below advertisement

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

Click to play video: 'Nova Scotia premier scrapping non-resident property tax' Nova Scotia premier scrapping non-resident property tax
Nova Scotia premier scrapping non-resident property tax – May 5, 2022

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.

Read more: N.B. carbon tax revenues likely to continue funding yearly income tax cuts, Higgs says

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.

Story continues below advertisement

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

Click to play video: 'Giving vote to N.B. permanent residents won’t happen by fall' Giving vote to N.B. permanent residents won’t happen by fall
Giving vote to N.B. permanent residents won’t happen by fall – May 27, 2022

“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.

Read more: N.B. announces $20M for low-income residents as inflation rises across Canada

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

Story continues below advertisement

“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.

Sponsored content