Auditor general takes over review of tax mess after former judge backs out

New Brunswick's auditor general says she's now overseeing a review of the province's property assessment fiasco after she raised concerns about a retired judge's possible "lack of independence."

Kim MacPherson will examine how Service New Brunswick badly miscalculated thousands of assessments this year, errors that led to shockingly large tax hikes for many of those property owners.

To be independent, you have to be independent in fact and independent in appearance.- Kim MacPherson, auditor general

MacPherson had decided to audit the numbers at the same time retired justice Joseph Robertson was conducting his review. Robertson was appointed by the province in April to produce a report on the situation.

MacPherson told CBC News that she told provincial officials May 9 that there was "an issue of independence" because Robertson was chosen by the Executive Council Office, which reports to Premier Brian Gallant.

Gallant's own office has been implicated in the assessment fiasco.

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​"I have to say I do have utmost respect for Justice Robertson, his credentials and his experience," MacPherson said.

"But the point was that when you are engaged by, and are expected to report directly to the Executive Council Office, or the premier and his cabinet, there can be a perception of a lack of independence. That was the discussion."

MacPherson is an arm's-length officer of the legislature and her reports are tabled there publicly, not delivered to the government.

"For someone to be independent, you have to be independent in fact and independent in appearance," MacPherson said. "It was the 'independent in appearance' issue that I felt was appropriate for me to raise."

Premier Brian Gallant appointed Robertson to review the property tax scandal after CBC News uncovered widespread errors with both assessments and taxes, including an arbitrary formula being applied in 2,048 of the bills issued in March.

The premier's office has denied any role in pushing to accelerate the adoption of a new assessment system that eventually caused a number of problems, though Service New Brunswick documents obtained by CBC News suggest the premier himself requested it.

The government plans to turn property assessments over to an independent agency.

After MacPherson told officials May 9 that she was doing her own audit, the province suggested that she and Robertson pursue their respective work and share information if they wanted.

'No alternative but to discontinue'

But Robertson said in a May 29 letter that he worried he and the auditor general would issue "conflicting findings and recommendations" and that her audit might jeopardize the promise he made to Service New Brunswick to keep their information confidential.

"In these circumstances, I concluded that I had no alternative but to discontinue my review," he wrote.

Robertson's review was due in mid-August, around the same time MacPherson normally delivers her audit of the province's financial statements for the past fiscal year.

MacPherson's review of the assessment fiasco is due by the end of November.

She looks at property tax revenue every year as part of her regular financial audit because the province collects about $1 billion of it annually. This year she decided to take "additional measures" on that because of the assessment errors.

Work done not wasted

Attorney General Serge Rousselle said Monday that Robertson had "the full capacity to do his review independently" but said the province respected his decision.

Under Section 12 of the Auditor General Act, MacPherson can issue subpoenas for potential witnesses and documents. She said Monday she doesn't think she'll need to do that, "but I have not started the work yet."

Rousselle was put on the spot Monday about how much Robertson will be paid.

"He will be paid for the work he has done," Rousselle said.

The government said late Monday the cost would be between $150,000 and $175,000.

The government will also pay for MacPherson's review, officials said.

Robertson's preliminary work will be transferred to MacPherson so "what he has done is not lost."

Rousselle defended the delay in sorting out the potential duplication by saying the government was respecting MacPherson's independence.

"We didn't know the auditor general was going to do that kind of work," he said. "It's her decision."

He didn't say why provincial officials didn't check with MacPherson earlier, which might have saved taxpayers some of the cost of Robertson's work.

"It is what it is," Rousselle said. "It is a situation we didn't foresee but we are making the best of it. I'm not saying it's an ideal situation. I'm saying it is what it is."