'Give us our money back': Mayors ask N.B. for a larger share of property taxes

Last week New Brunswick Liberals travelled to Saint John and set up in a Boston Pizza parking lot for leader Kevin Vickers to make a point about the need for wholesale liquor pricing for restaurants.

But for Saint John Mayor Don Darling the location spoke to a more urgent political issue that needs addressing by all political parties, the fact the Boston Pizza building behind Vickers carries a property tax bill of $61,173 with only $33,544 of that paid to the city.

New Brunswick's property tax take from businesses operating inside municipalities is the largest in Canada and New Brunswick mayors claim it is at the heart of all kinds of financial distortions that are holding cities back and restricting growth in the provincial economy.

"We're being governed by 1960's tax legislation," Darling said.

"I think if we were able to get a tax system that was very similar to other provinces then I think the city would thrive and we can move on from being in a state of crises on an annual basis."

Province collected $46.4M from Saint John in 2019

Most provinces operate like neighbouring Nova Scotia where the overwhelming amount of property tax collected from businesses, as with residences, goes to the municipality where the business is located. That allows for lower tax rates overall but higher revenue to the communities themselves

For example the Boston Pizza on Portland Street in Dartmouth pays a property tax bill 20 percent less than in Saint John ($47,890) but the regional municipality of Halifax receives 30 percent more from the company ($43,174) because the provincial property tax on business is a fraction of what is charged in New Brunswick.

Multiplied over thousands of businesses, the difference amounts to millions of dollars in higher property taxes businesses have to pay in New Brunswick but with less revenue making it through to municipalities.

According to government of New Brunswick estimates the province took $46.4 million out of Saint John alone last year in property taxes for itself. Although it returned $17.2 million back in municipal funding grants to the city, Darling said the overall net loss is the difference between a prosperous and struggling local government.

"Give us our money back and let us get on and let us grow this city," said Darling

Miramichi mayor Adam Lordon told CBC News at the start of the election a municipal property tax system reworked to match models used in other provinces would transform urban environments in every New Brunswick city.

"If municipalities in New Brunswick were able to keep all of the property tax revenue as they do in other provinces, that would effectively help us pay for that infrastructure deficit we're (all) aware of," said Lordon.

"We need vibrant cities with good infrastructure in order to attract and retain citizens."

Cities association wants province to abandon its cut

Lordon is head of the Cities of New Brunswick Association, which has been among the most vocal during the election calling for property tax changes.

The group represents the province's eight urban centres — Moncton, Dieppe, Saint John, Fredericton, Edmundston, Miramichi, Bathurst and Campbellton — and it is not advocating for tinkering, or minor changes.

It wants the province to largely abandon its take of commercial, industrial and apartment building property taxes in municipalities, which it estimates to be worth $360 million per year, and let cities and towns use the money or cut taxes as they see fit.

To soften the cost of that to the province the association suggests cancelling the municipal grant and equalization program, worth $68.6 million and charging property owners in rural, unincorporated areas significantly more on their tax bills.

"We're asking for a review or a reform of that system so that every New Brunswicker will pay their fair share for the services they use," said Lordon.

None of the parties have endorsed the cities' full plan but most have acknowledged something is wrong with municipal government and has to change.

Greens promise public inquiry

At his Boston Pizza appearance Liberal leader Kevin Vickers suggested he was willing to look at municipalities like Saint John keeping at least their industrial property taxes.

The Green Party has promised a public inquiry into New Brunswick's entire income, inheritance and property tax system with the NDP also proposing a comprehensive review. People's Alliance Leader Kris Austin told the CBC's Leaders on the Record event Wednesday the province should stop collecting property tax entirely in municipalities and last week PC leader Blaine Higgs said he is open to whatever municipalities propose.

"As we move toward municipal reform we need municipalities to define what that looks like," said Higgs. "They know best what's needed in their community and I want to find ways to fund them appropriately."

Those commitments may be vague, but Darling feels it is beginning to sink in with voters and political parties that being the province draining the most property tax revenue out of its cities might be worth a review.

"I've seen more conversations happening in the last couple of weeks on municipal reform, taxation reform," said Darling.

"We're getting good traction. I think it is positive we are having so many people talk about and understand how critically important municipal and taxation reform is."