introduction
This article provides the blueprint backdrop for a new provincial assessment and tax regime in New Brunswick.
Despite some haltingly positive steps over the last two years, many see the property assessment and taxation system in New Brunswick as very broken. I agree, but perhaps not for the same reasons as many would have. High taxes are not my issue, but the fairness and efficacy of the tax and assessment system most certainly is. This began to be particularly evident in 2022, the assessments for which reflected unprecedented increases in market activity and valuations. In NB prior to 2022, higher assessments inevitably led to higher property taxes, and this is most certainly not the way the system should operate. Moreover, mainstream media tends to perpetuate this unholy mix and creates additional confusion in the minds of taxpaying citizens.
Professional background
I am a CFA (come-from-away) who spent 40 years in Alberta, with some of that time as a chief elected municipal official and some of it on a rural area assessment review board. I also spent 16 years in private practice property valuation. Then, upon moving here almost four years ago (although we have actually owned our house here since 2014 and were landlords until we took possession ourselves), Service New Brunswick’s Property Assessment Services branch hired me to apply my valuation skills there.
This multifaceted experience has given me significant insight into how both home ownership and landlord-tenant relations work in NB and how that compares and contrasts to some of what I experienced in Alberta. This has truly opened my eyes to the inherent tax/assessment inequities and contradictions that are the basis of our collective fiscal frustration here.
Four areas to change
In the columns to follow this blueprint backdrop, I propose four specific areas that the government should consider changing for New Brunswickers to gain confidence in our property taxation and assessment regime.
Firstly, the government needs to revamp the Assessment Act so that it focusses on “Real and True Value” (as it does now), but within the context of assessment equity rather than absolute “correctness” of the valuation. Moreover (but no less importantly), property tax and assessment notices need to originate from the municipalities rather than from the Provincial government.
Secondly, the government needs to re-write the Real Property Tax Act so that it does not enshrine tax rates. The legislation needs to separate tax and assessment from each other totally, as this incestuous relationship is at the heart of our problem. I recognize that there has been some movement in this regard over the past while, with the Province actually lowering its enshrined rate in stages and some municipalities finally starting to see the light on this themselves but, until the tax rate at both the provincial and municipal levels focusses on budgetary requirements rather than on the assessments and rates themselves (and citizens understand the shift in thinking that this entails), the problem will continue (it does not look like this change in thinking as anywhere on the horizon).
Thirdly, the government should restrict the conditions under which tax agents, whom clients pay to have assessments reduced, operate so that large corporations, who can afford to hire such representation, stop benefitting from assessment/tax reductions that ultimately occur at the expense of small business and residential property owners.
Lastly, the government needs to professionalize and train/recertify assessment appeal boards so that:
1) they are not politicized;
2) they have the true knowledge to deal with complex matters; and
3) they become true quasi-judicial bodies that the law compels to make decisions strictly on the basis of evidence that both the plaintiffs and the assessors put before them.
What I don't discuss
Pursuant to this blueprint backdrop, I am not discussing whether the Province should derive the amount of revenue from property taxes that it does. Suffice it to say that, based on the services we all demand, the Government of New Brunswick has to draw its revenues from somewhere so, if the Province were to reduce or eliminate the amount it collects via property taxes, it would have to make up that shortfall somehow. (And, for the love of God, stop calling it a “double tax” – just because owner-occupied residential properties do not have to pay the provincial portion of property tax does not make everyone else’s taxes “double”. This is just misleading. I’m looking at you, Premier Higgs.)
Perhaps municipalities should have more “tax room” than what they currently have, particularly if the Province will expect them to do more under the municipal restructuring that is progressing, but this is another discussion entirely. Next: the Assessment Act
This article first appeared in the Telegraph Journal in June 2023 (not available there any longer).
Listen to a discussion on this series on the #NBPoliPod podcast!