'They did it on purpose': Province accused of deliberately overcharging homeowners on property taxes

An internal Service New Brunswick email obtained by CBC News shows senior provincial government assessment officials invented renovation amounts for 2,048 homeowners with large assessment increases this spring, allowing the province to evade a legal 10 per cent cap on the homes' property tax bills.

The email, written on Feb. 9 by SNB's residential co-ordinator Matthew Johnson, to 11 mid-level and upper-level assessment officials, says because there was not enough time to have professional assessors find out what, if any, renovations the properties might have undergone before tax bills were issued March 1, it was decided to invent renovation amounts for each home.

"The decision was made by HO (Head Office) to add a certain amount of NCMIC (New Construction or Major Improvement Change) to each of these accounts. Although it would have been optimal to have had the assessors identify the NBMIC amounts to be added it unfortunately wasn't possible given the time constraints imposed by fast track."

The 2,048 homes had triggered interest inside SNB because their assessments had increased by at least 20 per cent and $20,000. It was decided to treat all of them as though they had undergone major upgrades and Johnson provided a formula about how those renovation amounts were calculated.

By law, Service New Brunswick is required to cap annual property tax increases to homeowners at 10 per cent unless there have been major renovations to the property. 

By declaring all 2,048 of the homes to have undergone major improvements, the 10 per cent limit could be exceeded.

Increases not a mistake

To date the provincial government has blamed so many homeowners being charged increases more than 10 per cent on innocent errors. 

"We have identified miscalculations for 2017 that will be corrected," Service New Brunswick Minister Ed Doherty said in a press release on March 14.

But one SNB employee, who spoke on the condition of anonymity, says the email makes it clear the increases were deliberate, not miscalculated.

"They didn't make a mistake, they did it on purpose and now they don't want to get caught for it. So now they have to make it look like a mistake."

New system in place

This year SNB introduced a new highly automated assessment system in major urban areas in a deployment it called "fast track". 

The new system uses aerial photography and identified a large number of properties as being significantly undervalued. 

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But results came too late to be double checked by human assessors so a decision was taken to deem large assessment increases on many houses to be the result of renovations by homeowners.

Two weeks ago CBC News identified 1,186 homes in six New Brunswick communities that had received both assessment and tax increases above 20 per cent.  

Most of those would be among the 2,048 properties referred to in the email, although many of the homeowners contacted by CBC News deny undertaking any renovations.

Jaime Watling of Quispamsis said he did install two $300 laundry room windows in his house last year, but according to the formula outlined in the SNB email he was credited with $40,990 in renovations to justify the 31.9 per cent increase in his tax bill.

Watling said if that is how Service New Brunswick generated his tax bill it is a fabrication.  

"It's completely false," said Watling. 

"I'm not overly surprised they would try something like it. I don't have a lot of faith in government."

Province responds

Watling's property tax account — and four neighbours who also got tax increases between 25 and 31 per cent — have not been adjusted and Watling says he still has not received a notice from the province it made a mistake.

Service New Brunswick spokeswoman Judy Cole acknowledges the department did declare homes to have been renovated when they had not been.

"The properties in question were determined to have been new construction or undergone major capital improvements when, in fact, that was not the case," Cole wrote in an email to CBC News.

"Assumptions were made regarding the percentage of new construction and renovations included in these properties."

Cole also said the department is backing away from a commitment to issue corrected bills to homeowners by April 1, pushing the date back more than nine weeks to June 1.