Industrial plants, commercial buildings big winners as N.B. property tax bills go out

More than 400,000 property tax bills for 2022 are being mailed out across New Brunswick beginning Friday and while many homeowners will see increases from last year in what they are charged, the province's largest commercial and industrial properties will mostly be getting reductions.

In some cases reductions are in excess of $100,000.

"One word: egregious," said Saint John city councillor Brent Harris, who has been calling for an acceleration of promised changes to provincial property tax rules that are contributing to the billing disparity. 

"What I'd say to our residents is now is the time to pay attention."

On Saint John's Driftwood Lane, all 35 townhouses will be receiving tax increases of between $200 and $500 over last year when bills from the Department of Finance begin arriving this week and next.

That's because Saint John's heated housing market caused assessment increases of 16 per cent and above on the townhouses.  That was substantially more than a tax rate reduction of 4.2 per cent the city adopted in its municipal budget.  

Business properties in the city also received that 4.2 per cent tax rate cut even though they did not have similar increases in their assessments.  

Then last week the province announced its own tax rate cut on business properties, doubling their discounts. 

In Saint John the municipal and provincial property tax cuts plus a minimal assessment increase at NB Power's Coleson Cove generating station will combine to lower its tax bill this year by $163,000.

Also paying less will be Irving Oil Ltd.'s refinery ($154,000) and its King Square headquarters building ($126,000).   

JD Irving Ltd will pay fewer property taxes on its east side paper mill ($51,000) and wallboard plant ($15,000) while industrial infrastructure in the city will also be charged less, including the natural gas pipeline that serves the LNG terminal ($57,000).

Other cities

And it is not just in Saint John.

In Moncton, property taxes are going down on major retailers like Costco on Granite Drive ($26,000) and on office buildings like the privately owned Moncton Law Courts ($165,000).  Meanwhile homeowners on streets like Candice Lane face $400 tax increases and above.

In Dieppe, those owning homes on Doreen Crescent will see tax bills rising $200 and more while nearby the Majesta tissue plant and related warehouse, offices and truck yards are charged a combined $150,000 less than last year.

Municipalities blame property tax rules imposed on them by the province for some of what's happening.   

"The city did our best to lower rates this year but the province increased the overall bill," said Harris. "That's out of our control."

Current provincial rules require municipal property tax reductions to be universal and there is nothing local governments can do to steer savings among different property groups, even if assessments on some are rising much faster than others.

Harris says if cities are not allowed to set rates separately for homeowners and businesses, their tax bills will continue to move in opposite directions.

"This is all going to have major implications for next year's budget, and unless we get that separation sooner than later it isn't looking good," said Harris.  

Flexibility coming

The province has promised to give local governments some flexibility next year to raise and/or lower residential and business tax rates independently of each other.  Rates for homeowners will be able to be lowered as much as 12 per cent without requiring any discount to business properties. 

That would have allowed municipalities to avoid a lot of the lop sided tax increases homeowners are being hit with this year had it been in place earlier.

Alternatively municipalities will be allowed to raise tax rates on business from current levels up to 13 per cent without having to increase residential rates. 

The province says more reforms are coming but that counts as a reasonable start.

"The provincial government committed to property tax reform," said Department of Local Government spokesperson Vicky Lutes in an email

"We know people want a property tax and assessment process that is more fair, clear, and transparent."