New Brunswick nixes new property tax breaks for businesses, cottages
PC government unveiled tax cuts for certain properties in this year’s budget
Thrown into deficit by financial turmoil unleashed by the COVID-19 virus, New Brunswick Finance Minister Ernie Steeves has moved to cancel more than $20 million in property tax cuts for businesses and cottages that he unveiled in his budget just 11 weeks ago.
"We can all agree our fiscal situation is not the same as it was March the 10th, budget day," Steeves told the legislature Wednesday.
"In light of the COVID-19 pandemic, the government will not be proceeding with the proposed property tax measures contained in our 2020-2021 budget."
The measures being undone involve proposed relief for residential properties that are subject to secondary provincial taxes, including apartment buildings, cottages and single-family homes not lived in by the owner.
That budget proposal was to reduce taxes by $140.40 per year on every $100,000 those properties are assessed to be worth.
A large apartment complex like Moncton's Eagle View Estates, which has 64 units, was in line to save $9,253 in taxes beginning in January 2021. That's the equivalent of $12 per month per apartment under the original budget proposal.
A second tax cut on commercial and industrial properties is also being withdrawn. It was worth $82.50 per year on every $100,000 of a business property's assessed value.
It would have been a substantial saving for some of the province's larger business properties, including a $142,000 tax reduction for Champlain Place in Dieppe beginning next January and a $84,715 reduction in property tax on the Irving Oil refinery.
There was also a plan to lower the same taxes identical amounts in 2022, 2023 and 2024, providing a total of $96 million in annual property tax relief to business and cottage properties after the fourth year.
Premier Blaine Higgs said the province could not afford the loss in revenue, but he hoped to be able to restore the tax cuts when the province's finances improve.
"It isn't the time," said Higgs.
"I'm focused on doing this, I believe in lower taxes, I believe that does help the economy, and I believe people will invest more, so it's a balancing act."
Greens, Alliance react
In a reversal of normal responses to government initiatives, Green Party Leader David Coon praised the decision and People's Alliance Leader Kris Austin condemned it.
"There is indeed wisdom in the decision of the minister of finance," said Coon.
"I think that's a bad move," said Austin outside the legislature. "If we continue to tax businesses the way we've been taxing them, you can't expect the New Brunswick economy to grow."
Last week Steeves revealed New Brunswick is headed toward a $299.2 million deficit this year after his March budget originally projected a $92.4 million surplus.