New Brunswick municipalities will experience a delay in new revenue streams until 2027, a year later than previously promised by the former provincial government. The recent throne speech confirmed that the changes resulting from the government’s property tax system overhaul will take effect for the 2027 tax year.
The interim Progressive Conservative leader is raising concerns about the deceleration in progress since his party’s departure from office. Glen Savoie, the former local government minister, expressed disappointment, stating that significant work was already in motion when they were in power.
Aaron Kennedy, the current local government minister, mentioned ongoing discussions resulting in a $63 million increase in provincial funding for municipalities, which includes a $45 million capital renewal fund. Regarding the property tax and assessment system overhaul, Kennedy emphasized the importance of prioritizing accuracy over speed in the process.
The government’s municipal reform process, outlined in a 2021 white paper, aimed to introduce a second phase of fiscal reform by the 2025 tax year. This phase would ensure greater fiscal stability for local governments through potential changes such as revamping the property tax system, diverting cannabis revenue, and sharing traffic fine proceeds.
The first phase of fiscal reforms, implemented by the Blaine Higgs government in 2023, granted municipalities more flexibility in setting tax rates for residential and industrial properties. However, efforts to diversify revenues beyond this initial phase have stagnated, prompting calls for action from municipal leaders as operational costs continue to rise.
A report from Mount Allison University estimated that New Brunswick’s municipalities face an annual funding shortfall of approximately $200 million. Green Leader David Coon criticized the province’s decision to freeze 2026 property assessments, emphasizing the need for diversified revenue sources to support municipalities.
The Union of Municipalities of New Brunswick highlighted that the assessment freeze in 2026 would result in limited tax base growth for the majority of municipalities, affecting their ability to address increasing pressures. While acknowledging the time required for a comprehensive property tax overhaul, the organization stressed the importance of addressing evolving community needs.
Kennedy defended the 2026 assessment freeze as an affordability measure for residents, allowing time for a thorough review of the system. He expressed hope that municipalities could avoid raising tax rates this year, emphasizing the importance of ensuring fiscal decisions benefit New Brunswickers.
In conclusion, the government’s commitment to enhancing municipal revenue structures is expected to bring about significant changes by 2027, despite the delay prompting concerns among stakeholders.