New revenue streams for New Brunswick municipalities are now expected to be in place by 2027, a year later than initially anticipated by the previous provincial administration. The recent throne speech assured that modifications resulting from the government’s property tax system revamp would be implemented by the 2027 tax year.
Interim Progressive Conservative leader Glen Savoie has raised concerns about the decelerated pace of change since his party relinquished power. Savoie, who previously held the position of minister of local government, noted that progress was well underway before the recent election.
Current local government minister Aaron Kennedy disclosed that discussions with municipalities led to an increased provincial funding injection of $63 million, including a $45 million capital renewal fund. However, Kennedy emphasized the importance of prioritizing accuracy over speed when it comes to revamping the property tax and assessment system.
The 2021 white paper outlining the government’s municipal reform process had proposed a second phase of fiscal reform by the 2025 tax year, aiming to enhance fiscal stability for local administrations through potential changes such as a property tax system overhaul, revenue diversification from cannabis sales, and sharing traffic fine revenues.
The first phase of fiscal reforms was initiated by the Blaine Higgs government in 2023, granting municipalities more flexibility in setting tax rates for residential and industrial properties. Plans for a broader overhaul in 2026 have faced delays, prompting calls from municipal leaders for timely action as operational costs escalate.
A report by Mount Allison University economist Craig Brett estimated that New Brunswick municipalities are encountering an annual funding shortfall of approximately $200 million. Moreover, the decision to freeze property assessments for 2026 has further constrained municipalities, according to Green Leader David Coon.
The Union of Municipalities of New Brunswick highlighted that the assessment freeze would result in inadequate tax base growth for 82% of municipalities, falling below the Local Government Cost Index. Dan Murphy, the organization’s executive director, stressed the urgency of addressing municipalities’ evolving challenges.
Kennedy defended the 2026 assessment freeze as a necessary affordability measure and a strategic move to facilitate a comprehensive overhaul of the taxation system. He expressed hope that local governments could refrain from raising tax rates while finalizing their budgets for 2026.
In conclusion, while the timeline for revenue stream implementation has shifted to 2027, the province aims to ensure a fair and transparent property tax system that benefits New Brunswickers and addresses the evolving needs of local governments.