Municipal Fiscal Reform - Election 2024

Between 2021 and 2023, the Government of New Brunswick implemented the most profound reform of local government since Equal Opportunity in the 1960s. This resulted in the reduction in the number of municipal entities from 340 to 89 and greatly expanded the mandates of 12 Regional Service Commissions.

This reform caused a significant shift in responsibility for key public services. While structures and service ownership have changed, the ability to pay for this new service delivery model has not kept pace.

The Regional Service Commissions (funded partly by municipalities) are now responsible for areas such as:

economic development
tourism
community and social development
public safety

The province has downloaded responsibility for many services to the City.

The New Brunswick government says it will usher in Part 2 of the Local Governance Reform (fiscal reform) by Jan. 1, 2026. In the meantime, municipalities such as Moncton are severely strained to pay for services within the current financial framework. We are structurally underfunded. Moncton receives just eight cents for every tax dollar collected from its citizens.

What Moncton needs

1 - The provincial government collects $61 million in property taxes in Moncton (minus $14 million of tax on provincial buildings) per year. Transfer the net $47 million in provincial tax revenue to the City. The City would then be able to work with the Province to lower the rate for non-owner-occupied dwellings (double tax) to be more competitive with our counterparts across Canada.

2 - Commit to the transfer of one per cent of HST revenue to municipalities. The current government has estimated this at $225 million per year. This revenue share to municipalities should be on a per capita basis, meaning that Moncton, which, according to the latest Statistics Canada data, has a population of 91,085, should receive 11 per cent of that $225 million – or approximately $24.5 million per year.

3 - Fulfil the existing promise of transferring the excise tax on cannabis sales. In 2022-2023, this represented $13 million to the province. On a per capita basis, this would make available $1.4 million to Moncton.

4 - Undertake a review of provincial tax assessment legislation and create a true and fair equalization formula. Our legislation governing assessments and real property both date to 1973.

5 - Implement Part 2 of Local Governance Reform – Financing – in time for the 2025-2026 provincial budget – and not by Jan. 1, 2026.

What party leaders say

Party leaders and local candidates were invited to a Special Council Meeting on Sept. 11, 2024. Each party leader was invited to address Council and to answer questions related to the City’s four election priorities.

Below are the questions and responses for each party related to fiscal reform.

Highlights of their review of Moncton Matters document

Green Party

Represented by party leader David Coon, MLA for Fredericton South

Committed to a transfer of the majority of the industrial property tax to municipalities.
Committed to an overhaul of the property tax system.
Committed to sharing the cannabis revenue with municipalities as promised.
Committed to an overhaul of the equalization formula in consultation of municipalities.
Looking to have a property tax system allowing for flexibility in property tax multipliers for different property tax rates and to add additional categories.

Liberal Party

Represented by party leader Susan Holt, MLA for Bathurst-East-Nepisiguit-Saint-Isidore

Believe the fiscal reform process should have been done first. Made a commitment for new fiscal framework and funding formula and recognize that more tax revenue is needed for municipalities.
Property tax system overhaul is a must. Plan to review the assessment process, and categories to incentivize and densify and ensure it is transparent and provides predictable funding so we are competitive with our neighbors, making service delivery affordable and moving us forward as a province.

Progressive Conservative Party

Represented by party leader Blaine Higgs, Premier of NB and MLA for Quispamsis

Expressed need to better manage the health-care system. Information systems solutions to increase client focus will be leveraged.
Focus is on an HST reduction and balanced budgets.

Responses to questions

1. Is your party committed to completing the local governance reform process by creating a new municipal fiscal framework in partnership with municipalities?

Green: Yes.
Liberal: Yes. Made a commitment for new fiscal framework and funding formula and recognize that more tax revenue is needed for municipalities.
Conservative: Everything is on the table and believe municipalities should lead the charge.

2. Will you commit to completing this fiscal framework before Jan. 1, 2026?

Green: Unclear, although a statement was made recognizing the urgency of the exercise.
Liberal: Unclear.
Conservative: No commitment. Will be in a position to lay out the timelines of the process in November after meeting.

3. Will your government commit to the transfer of property tax and a percentage of HST revenues to municipalities as part of this framework?

Green: Hesitation as health-care system is crumbling therefore the generational investment may trump this. Open for discussion but recognition of the challenges faced by municipalities.
Liberal: We cannot commit to one or another but the right mix of revenue generation for municipalities needs to be determined in partnership with them so it’s not a one-size-fits-all approach.
Conservative: Everything is on the table and believe municipalities should lead the charge.

4. Will your government agree to sit down as partners with municipalities to look at a new equalization formula that allows municipalities to properly plan for asset management and growth?

Green: Yes, we are committed to do so.
Liberal: Yes, UMNB has put together a good plan and we may use that as a starting point for our review of the equalization formula.
Conservative: Everything is on the table and believe municipalities should lead the charge.