The headline of “tax rate cuts” was all the rage at municipal budget time
Headlines trumpeting “tax rate cuts” were all the rage in the latter part of last year, as municipalities went through their budget processes. This is the story line they used to populate their own websites and one that much of the media (not all) bought whole hog, without question or deeper analysis.
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As I wrote at the time, “lowered tax rate” isn’t the right headline (neither is the headline of keeping tax rates steady). What people really want to know is: 1) how much more is the government’s budget this year and on what is it spending money? and 2) how much more tax will I have to pay this year than I did last year? That’s it. The rest is all just noise.
Now that Service New Brunswick has mailed the assessment notices, we can get a better idea about what property owners will really be up against in 2025. I’m aware that Finance and Treasury Board won’t actually mail our tax notices until March 3 but I’ve managed to gather enough information so that we can all prepare ourselves accordingly.
Below are three properties with which I have passing familiarity: one in Dieppe, one in Miramichi, and one in Riverview. Below the table, I show the respective municipal authorities’ comments in the wake of their budget deliberations. Note that each property I use happens to be eligible for the (monumentally stupid) ‘Spike Protection Mechanism’.
Three municipalities under the microscope
Dieppe
As per TJ News: “Marc Melanson, the city’s chief administrative officer, said [that] the city decided to decrease its tax rate after a number of residents had talked last year about their worries of an increased property tax bill.”
“The reduction represents roughly $3.62 million in lost revenue (emphasis added), and Melanson said to be able to reduce the tax rate, Dieppe’s base budget, budget process and financial plan have been revised. ‘We were able to help residents while also respecting our obligations as a municipality,’ he said.”
I guess they forgot to mention that the taxes on a typical property like my Dieppe example would be increasing by $190 (almost 5%). I also guess that there is some good reason why the City of Dieppe website doesn’t mention that their budget spending is up over 6% from last year – and neither does the TJ article.
But who’d want to know those things when all eyes should be on that reduced tax rate, right?
Miramichi
As per the City of Miramichi website: “The City’s residential tax rate will remain the same at 1.715 per $100 assessment. ‘Despite the cost of everything increasing – and we felt that in this chamber as many people including us, are feeling this at home – we are not raising the tax rate again this year,’ said Mayor Adam Lordon.”
Yes, because we wouldn’t want to give up all the free money that comes about magically from increased assessments. And we wouldn’t want to mention the $360 (9.88%) increase on a modest residential property in Miramichi, as per my sample above. Why do that when we can draw people’s attention to tax rate “stability” instead?
Once again, lots of concern for those hard-done-by ratepayers while budget expenses and taxes increase anyway but get no mention.
(Note: I know Mayor Lordon a little bit and have a lot of respect for him on many levels. However, that doesn’t mean I’m not going to call out the disingenuity of trumpeting stable tax rates while taxes themselves continue to increase.)
Riverview
As per TJ News: “The budget document says that by reducing the tax rate, the town is giving up approximately $1.3 million of potential revenue (emphasis added). ‘Any tax rate reduction is meant to help offset some of the increase of provincial tax assessments,’ Mayor LeBlanc said Friday. In Riverview, the median cost of a house is approximately $320,000 and a lower tax rate makes it more affordable.”
“‘We’re happy to drop the tax rate another five cents. That’s a 21-cent drop in the last four years and that makes life more affordable for residents,’ LeBlanc said.”
I’ve already picked on Riverview in these pages but our typical property there is going to pay an additional $192 in taxes (a 6% increase). I guess “affordability” is in the eye of the beholder.
And, of course, we have blaming of assessments for increased taxes instead of focussing on the 9.8% increase in budget spending. Par for the course, Riverview.
Wait – there’s more…
A couple more things to remember when considering the aforementioned examples.
One is that, as I mentioned, each of the three properties above is eligible for the ‘Spike Protection Mechanism’. If any of these had sold in the past year, the new owners would be paying a lot more tax than the current owners paid the year prior, as we can see from the table above.
But at least the new owners would be sleeping well at night knowing that their respective municipalities were concerned about “affordability” when drawing up their budgets and had either lowered their tax rate or kept it stable. Right?
But the kicker for me is the City of Dieppe talking about the “$3.62 million of lost revenue” or the Town of Riverview “giving up approximately $1.3 million of potential revenue”. I know where this comes from – it’s the idiotic ‘Assessment Growth’ document that Finance and Treasury Board issues annually. It includes a column labelled, ‘Potential Additional Property Taxes Revenue (at 2024 Tax Rate)’.
So some municipalities look at this and say, “We have a right to that money.” Except that they don’t. Not even a little bit.
As I said in a previous article, that money was never the municipalities’ to begin with, regardless of what some tall forehead in Finance and Treasury Board thinks or at least appears to convey. If your municipal budget doesn’t require that money, then you have an absolute obligation to your ratepayers to reduce the tax rate. Period.
Not all increased spending is bad
The other thing is that, although not included in the table above, none of the three properties I use as examples has ever experienced a decrease in taxes from one year to the next since 2021. Not even by a few dollars.
So how about letting people know this, instead of blowing smoke on your respective websites and in the media with tax rate reduction, flowery budget talk, and assessment-blaming hyperbole? I won’t hold my breath.
That having been said, though, I don’t want it to sound like all increased government spending is bad. We all know that everything costs more these days and some municipalities, such as the Town of Sussex, have particular issues that they must prioritize with increased spending, such as flood mitigation.
That, of course, didn’t prevent the Town’s Mayor from recently blaming assessments for increased taxes anyway, but he really doesn’t have to do that. If flood mitigation isn’t a worthy budget expenditure, what is?
Municipalities and the media alike should bring legitimate budget expenses and increased costs to the forefront, where they can be considered and debated. Way more productive, useful, and correct than reverting to the tried and true by blaming those increased assessments.
A reminder that taxes don’t go up because assessments do. Taxes go up because budget spending – at whatever level – goes up. Sometimes even when necessary, believe it or not.
Where the focus should be
However, instead of open public debate about budget spending and taxes, many municipalities continue to hide behind the assessment and tax rate curtain. It’s no surprise, then, that ratepayers lose their s&%t over increased assessments once that January envelope arrives.
Have another look at the table above with the three property examples. Pay close attention to how much the respective budgets have increased from 2024 to 2025. Then tell me again that taxes increase because assessments do.
Or that ‘lowered tax rates’ are something we should be ever-so grateful for.
Dear municipalities,
Tell us what we need to know and stop hiding behind what we don’t. Come clean about who’s responsible for what. Time to own your decisions.
Then, regardless of what reforms the Provincial government does or doesn’t implement, we’ll at least know where we stand. And maybe, for just a brief breathable moment, we won’t feel the burden of our broken property tax system quite so harshly.
This piece was first published in the Northumberland Free Press, 2025-02-01
Excerpt from TAXING NEW BRUNSWICK
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With no revenue neutrality, NB “fails to meet the test of open and transparent property taxation”
The ‘Spike Protection Mechanism (SPM) does property owners no big favour
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New property assessment valuation date in 2025 – how does this affect you?
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Property assessment and taxation reform: the Real Property Tax Act
Why “lowered tax rate” isn’t the right headline
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