Businesses reap big property tax savings under new plan
A property tax relief plan for seniors was cancelled over fears of long-term costs
A property tax relief program for New Brunswick businesses created by the Alward government is proving to be far more expensive than a property tax relief program for seniors that was cancelled, according to government figures.
"I was angry. I was angry as a taxpayer and a senior citizen," said Bernard Beukeveld, a Quispamsis resident, referring to the assistance to businesses.
"His words to me were, if I recall them correctly, were that we could not afford it. And lo and behold, months later big industry throughout the province got a great, great tax cut unasked for."
New Brunswick businesses, large and small, quietly received a second straight property tax cut in January, back-to-back reductions that will cost the provincial government an estimated $36 million in lost revenue by the end of this year.
A third tax cut scheduled for next January and a fourth set for January 2016 will accelerate those savings significantly and put owners of businesses, apartments and cottages in line to save more than $400 million on their property tax bills within 10 years.
Promised tax relief for seniors cancelled
The provincial government cancelled the property tax assessment freeze for 60,000 seniors, who own their homes because it was projected to cost $173 million within 10 years. That is less than half of the cost of the business scheme.
The Alward government has offered to defer assessment increases for those older than 65 instead, with the provincial government taking liens on homes of seniors to secure unpaid taxes. A CBC News investigation revealed only 60 of the 60,000 seniors promised tax assistance in the 2010 election have subscribed to the new program.
In Sussex Corner, Denis Pinet, 66, said he has no interest in the provincial government's deferral program, even though his tax bill jumped $100 this year following a $9,100 assessment increase.
"I don't know anyone who has taken advantage of it, to tell you the truth,” said Pinet.
"I know why I didn't take advantage of it. I just didn't want to burden my children with the debt. I look down the road and this is going to be quite a bit of money."
Given Pinet's property value and Sussex Corner's tax rate, an annual four per cent increase in his assessment would leave him owing the province $23,000 in back taxes plus $6,500 in interest if he joined the deferral, agreed to a lien and owned his home another 20 years.
Businesses benefit from tax relief
Although Sussex seniors, such as Pinet, are not enjoying property tax relief, Sussex businesses are. The town’s Main Street has provincial property tax cut recipients from one end to the other.
Savings for the Tim Hortons, next to McDonald's restaurant, and a second Tim Hortons in the middle of town, are approaching $2,400, including $800 in 2012 and $1,600 this year.
Three Sussex bank branches on Main Street, including the Royal Bank, Scotiabank and TD Canada Trust will have saved a combined $5,000 on their property tax bills by the end of the year. Wal-Mart, at the bottom of Main Street, is saving more than $13,000.
Those savings are being repeated in communities all over New Brunswick and are greatest for companies with the most valuable properties. The province's three Costco outlets have saved $85,000 so far and the Irving Oil Ltd. refinery has saved more than $200,000.
That upsets Beukeveld, who is one of the 60 who signed up for the seniors’ tax deferral to try and salvage a fraction of the property tax assistance promised during the last election.
"It doesn't compare," said Beukeveld, of the deferral program.
"They knocked the feet from under us with the secondary program which doesn't come close to what was promised."