Freeze: Passing grade for NB assessment freeze

Zap! You’re frozen! (Bonus points if you remember who originally said that)

On May 6, the Holt Government announced a freeze on property assessments for 2026 as an interim measure, while continuing to work on comprehensive property tax reform over a more extended period.

I applaud them for recognizing that true systemic reform will take longer than they may have initially thought. In the October 2024 election, the Liberals promised to make significant changes in time for the 2026 tax year; I’m glad they realized this time frame was unrealistic.

The last time New Brunswick underwent significant systemic change in the property tax system was via the Byrne Commission in the early 1960s. This was a complex, multi-year project, and there’s no reason to think it would be different this time.

True reform would require significant changes to various pieces of legislation and internal modifications that could potentially include reassessment of entire classes of property. They certainly can’t do this properly in less than a year, so a freeze makes sense.

And if they don’t tackle it at a fundamental level, why bother at all? The Liberals will pay dearly if they raise people’s hopes and change only the bare minimum. Nothing is more damaging in politics than dashed expectations.

Opposition finds fault

Unsurprisingly, Interim Opposition Leader Glen Savoie quickly jumped on the government for breaking a campaign promise to reform the entire system within a year. However, I think this reflects the Progressive Conservatives’ lack of understanding of how complex the property tax system is. It’s far more than “fiddling with tax rates,” as PC leader at the time, former premier Blaine Higgs, suggested last October during the election campaign.

The leader of the Green party, David Coon, wasn’t much better when asked about the freeze. It will “make property assessments jump more next year and create the requirement for some municipalities to raise their property taxes this coming year.”

Well, yes, Mr. Coon: If municipalities want to spend more, they’ll actually have to raise taxes. That’s how the system is supposed to work. But they won’t have to increase just because the assessments do – that’s simply wrong.

Better that the Holt Government takes the time to get property tax reform right and roll it out in stages rather than rushing it through to meet an arbitrary deadline.

Problems with the announcement

Positives aside, it’s disappointing that the Holt Government refuses to offer a time frame for completing the reforms. The assessment freeze is a good way to buy some time to do the job properly, but people need to know what to expect, even if only in the broadest sense.

Ideally, the government should make clear what areas it intends to address, then lay out a timetable for when it expects to complete each stage. At this point, we have neither.

It’s also disappointing that the government has not indicated when, or even if, they will call for public input. We know they’re working on reform, but we don’t know what options they’re considering or who has their ear. The more secretive they are, the more difficult it will be to obtain public buy-in for whatever changes they eventually enact.

One final point: I wish that the Minister for Service New Brunswick, Hon. Aaron Kennedy, hadn’t couched the assessment freeze as an effort to maintain “affordability.” It does nothing of the sort, and it’s disingenuous to suggest otherwise. It may be a necessary measure to buy the government some time, but it’s certainly no more than that.

Once again, the municipalities misunderstand the role of assessments…

The most telling part of the announced assessment freeze is just how quickly the municipalities – via the Union of Municipalities of New Brunswick (UMNB), the Association francophone des municipalités du Nouveau-Brunswick (AFMNB), and individual municipal politicians – jumped all over it as being something horrible, a “chokehold,” as one municipal official put it.

If ever we needed more evidence of how broken, abused and misunderstood the property tax system in New Brunswick is, and of how mealy-mouthed municipal officials have been about who is responsible for tax increases over the years, this seals it.

Property values should serve as a tangible proxy for our relative ability to pay, and nothing else. Have a bigger house? You should be able to pay more tax. A smaller house? Less tax. To quote an excellent City of Calgary document on this topic: “Assessment acts only as a mechanism to annually distribute taxes to each taxpayer in an equitable manner.” This is how it’s supposed to work.

But it doesn’t, not in New Brunswick. The International Association of Assessing Officers says our tax rate-driven system “fails to meet the test of open and transparent property taxation.”

In New Brunswick, municipalities – and the province, too, in cases where provincial tax applies – have relied on rising assessments to increase revenues. More importantly, from their perspective, they have always been able to blame increased tax bills on increased assessments (and those big, bad assessors), thereby deflecting proper scrutiny of their spending decisions.

…and scream bloody murder about the freeze

It’s critical to remember: Taxes don’t increase because assessments do. Taxes increase only when government spending does. Period.

With frozen assessments, whom will the municipalities now blame when tax bills increase? Not the assessments, not this time. Nor will they be able to play that sneaky game of, “We lowered the tax rate a little – look how much we care about affordability” while still increasing actual taxes by several percentage points because of increased spending.

No wonder the municipalities are screaming bloody murder. It’s not because they won’t be able to raise additional revenue – they can increase the tax rate any time to accomplish that – it’s because they’ll now have to look their citizens in the eye and justify why their costs have increased.

To be fair, municipalities play the game the way they have always played it. They depend on increased assessments for additional revenues and are genuinely gobsmacked when they’re finally advised that this isn’t the way it will work, at least not in 2026 (and forever more, I would hope). The tone of the UMNB and AFMNB press releases about the assessment freeze shows how deeply entrenched this thinking is.

We need to see assessment and taxation as two distinct processes

But this response tells us that keeping assessment and taxation separate in our thinking is not just a municipal PR issue but a cross-province issue of public policy. New Brunswickers need to understand that increased assessments shouldn’t automatically lead to increased taxes (they don’t in most of the rest of Canada). We should spend far more time holding elected municipal politicians accountable for increased taxes than focusing on rising assessments.

I expect the freeze to be temporary and hope the Holt government addresses all the issues related to how property is assessed in New Brunswick. But the issue of how much tax you pay isn’t part of that.

Perhaps the best outcome of this announced assessment freeze is that it will help us all understand who in the system should be held accountable for our tax bills.

Then, both the government and we, the taxpayers, can move on to all the other stuff that’s driving us crazy in this broken system.

This article was originally published in the Telegraph-Journal on 2025-05-10

Bonus content: A one-act play about property taxation in NB

People: “Our taxes keep going up! Stop increasing the assessments!”

Province: “OK. We’ll freeze them for a year.”

People: “Yay!”

Municipalities: Whoa, whoa! Let’s not get hasty here! What about us?”

Province: “You can raise your tax rates to whatever level you need, right?”

Municipalities: “That’s just crazy talk!”

People: “You mean our taxes are still going to go up?”

Province: “So maybe assessments aren’t the problem.”

People: “Wait. What?!”

Municipalities: “Damn. Busted.”

(curtain)

Holt gets passing grade for property assessment freeze – for now