Real estate consultant warns Liberal MLA's tax proposal could hammer small business

A commercial real estate consulting firm is warning a proposed amendment to the New Brunswick's Assessment Act aimed at heavy industry could see small businesses forced to pay property taxes on cash registers and storage racks.

Turner Drake and Partners, based in Halifax, raised the alarm in an "Action Alert" obtained by CBC News. The letter is dated Jan. 9 and was sent to company clients.

"Consider the value of your equipment, storage racking, display coolers, and other installations and recalculate your tax bill assuming the value of these items will be included in your assessment," the letter stated.

"What's in store is a major shift in the tax burden toward businesses who already share more than their fair share!"

The letter said businesses affected could include convenience stores, bakeries and hospitals.

Turner Drake urges business owners to contact "stakeholders and your MLA and hope that common sense will prevail!"

The senior manager of Turner Drake's property tax division, Andre Pouliot, is listed as a contact, but he would not comment, saying only that the letter was an internal document for clients.

Saint John Harbour Liberal MLA Gerry Lowe introduced the proposed amendment in the legislature on Dec. 12.

He said the bill is aimed squarely at lifting tax exemptions granted decades ago to heavy industry and will not target other businesses. 

Property tax exemptions for heavy industry have long been discussed at the municipal level in Saint John, with the Irving Oil refinery and J.D. Irving Ltd. often being singled out as major beneficiaries.

In July, councillors approved an internal "White Paper" that called, in part, for the removal of exemptions for heavy industrial equipment.

Councillors believe the industry exemptions drive up the tax rate charged to residential property owners, the highest in the province, and to small businesses.

'Totally overkill'

Mayor Don Darling said the Turner Drake letter seemed to have been written in haste and "lacked context."

"I can't help but ask myself, 'I wonder who the client was for this document?'"

Lowe called the letter "totally overkill."

"They know better than that. And I can understand, they're working on behalf of big industry, I'm sure."

He said the bill will be debated publicly and will likely be amended before a final vote.

It has support from the Liberals, the Green Party and the People's Alliance, meaning it would pass if that support holds. Premier Blaine Higgs has also expressed support for taxing heavy machinery. 

Sees potential harm to investment

Commenting on the bill, Mary Keith, a spokesperson for J.D. Irving Ltd., said there is only one province in Canada that has a broad based machinery and equipment tax. 

"We are concerned about the signal this sends to those looking to invest in NB and what it means to existing NB manufacturers in terms of investments to modernize and sustain good paying jobs," Keith said in an email.  

"For all NB manufacturers there are thousands of NB suppliers who depend on these operations, in addition to the direct jobs these operations generate."