Fredericton airport gets 2nd year of tax-rate freeze not afforded to many homeowners

For the second year in a row, the Fredericton International Airport is getting a property tax freeze while thousands of residents will see their rate increase again.

"I would say it is totally unfair. It just makes no sense to me at all that they would do that," said Joe Wood, referring to a budget plan adopted by city council last month.

Wood lives in Douglas, which is now part of Fredericton. He is one of the roughly 4,500 residents who were affected by Fredericton's amalgamation in January 2023 as part of province-wide reforms.

Also included in the amalgamation was the Fredericton International Airport.

In the first year after amalgamation, the city raised property tax rates for all of those new residents, and the airport by five cents.

But for this year, council chose to raise the tax rates paid by newly amalgamated property owners by five cents, while freezing the rate paid by the airport. It's set to do the same next year.

WATCH | Airport's property tax stays grounded while some residents' rates soar: 

Many Fredericton homeowners see property tax hikes, while airport's stays the same

13 days ago

Duration 2:38

City council has agreed to keep the Fredericton International Airport's property tax rate frozen for two years in a row, while raising the rate paid by thousands of residents added by the recent amalgamation.

Since amalgamation took effect, the City of Fredericton has been working toward bringing the rates paid by the new property owners in line with the city's inside tax rate, said Coun. Greg Ericson, who's also the city's budget and finance committee chair.

That inside tax rate — paid by property owners who enjoy the full suite of city services — will stand at $1.3086 per $100 of assessed property value next year, compared to the rate for amalgamated areas, which will range from $0.6159 to $0.7286 depending on the area, in addition to a provincial road maintenance tax rate of $0.4115.

Economic development cited as reason to freeze rate

The airport's property tax rate, however, will stay frozen at $0.5042 — a decision made to help it bounce back from a pandemic-related downturn in passenger air travel, Ericson said.

"This is an economic development measure, essentially," he said in an interview.

"We know from having engaged with the airport, the challenges they're facing reclaiming their market share coming out of COVID, and then balancing the new expenses associated with their renovation, so council made the decision to keep their tax bill stable."

Ericson said even if some residents never use the airport themselves to travel, subsidizing its operations by offering it a lower tax rate is worthwhile to all residents.

"The airport is really an economic driver for most of western New Brunswick and ... to have a high quality airport for the capital city is a very important thing."

CBC News asked the Fredericton International Airport Authority for an interview about the need to keep its property tax rate frozen.

Spokesperson Kate O'Rourke said in an email that questions should be directed to the city. But she added that the annual economic impact of the airport stands at $254 million, though she said the study by Canmac Economics showing that wouldn't be released until next year.

CBC News asked municipal officials for the cities of Dieppe and Saint John whether they give property-tax favours to their respective airports.

Both municipalities said by email that they do not. Kevin Fudge, Saint John's chief financial officer, added that non-residential properties pay a rate that's 1.7 times higher than residential properties.

Tax favours not uncommon, says expert

Still, it's not uncommon for municipalities and provinces in Canada to carve out tax favours to help keep airports afloat, said John Gradek, a McGill University lecturer in supply networks and aviation management.

In New Brunswick, airports including Fredericton's are already exempt from paying provincial property taxes.

Considering the economic spinoffs and what's at stake if the airport were to close, Gradek says he sees the tax freeze as a worthwhile investment by the City of Fredericton.

"If you're in a restaurant business in downtown Fredericton or you're in a, you know, a bus service or you're running taxis in Fredericton, there's business being had, you know, being created as a result of air passengers using Fredericton's airport," he said.

The significance of the airport for Fredericton's economy isn't lost on Wood, who said he understands some businesses benefit from the spending that occurs from people travelling into the city.

But with him and his neighbours already struggling with soaring property assessment values, he thinks it's unfair to offer relief to one specific tax-payer while raising rates for others.

"There are a lot of people out here that were affected by COVID and everything that happened with it, whether they lost jobs or whether they were laid off for periods of time.... And in the meantime, the assessments keep going up and the tax bill keeps going up, and they're trying to recover from what they went through."