Opposition bill would do away with industrial property-tax exemptions

Liberal MLA Gerry Lowe has introduced a bill that would make industry pay higher property taxes, so that residents — people of Saint John in particular — might pay less.

His proposed amendment to the Assessment Act would repeal property-tax exemptions allowed for heavy machinery and equipment. The exemptions have hamstrung the City of Saint John financially for years, the city has said.

Saint John has the highest municipal tax rate in the province, at $1.785 per $100 of assessed value, but Lowe, a former councillor in the industrial city, said the legislation would "level the playing field."

"It's ridiculous what's going on," he told reporters Wednesday at the New Brunswick Legislature. "It hasn't been talked about for years and years, and everybody's ducked it for years, both governments."

If industry paid more property tax, the Saint John Harbour MLA believes, the city would have more revenue and could lower residential rates.

Although he said the bill wasn't a direct request from Saint John, Lowe has been among city officials and others who studied the issue and fought for fairer taxation in recent years.

The Irving Oil refinery in Saint John has been the focal point of the fight, since refineries are mostly machinery and equipment. Most machinery and equipment is exempt from property tax in New Brunswick, which is different from the rules in at least half the Canadian provinces.

A 2017 report from the city estimated residential property taxes could be cut by 33 to 48 per cent if the exemptions were lifted.

Lowering the tax rate for residents is Lowe's focus, he said.

"If taxes go down, the people will move back to Saint John and things will get better," he said.

It would be up to city council to lower the residential property tax rate, and Lowe's bill would have to get through the legislature first. He said he's confident it will.

Third-party support

The Liberal bill has the support of the Green Party and the People's Alliance — enough votes to be passed in the minority government situation, where the Progressive Conservatives have the most seats.

Both Green Leader David Coon and Alliance Leader Kris Austin said Wednesday that their parties campaigned on the issue in the recent provincial election.

"It speaks to the need for a larger look into our whole property-tax system," Coon said, adding he's suggested a royal commission be initiated to address the system and other municipal issues.

Austin said he would support the bill, but it will likely need some amendments. His main concern is hurting small business.

"We don't want to tax industry out of the province," he said.

Lowe said he expects that the bill will be rewritten and that there will be discussion about the definition of heavy machinery and equipment.