Property tax review of large N.B. mills not yet public

September 11, 2020

By: The Working Forest Staff

CBC NEWS — Service New Brunswick is not saying what happened with a major property assessment review it did of the province’s six pulp and paper mills that had a hard completion deadline of last week.

Even Progressive Conservative Leader Blaine Higgs is saying he doesn’t know the results.

“Municipal taxation levels on heavy industry — understanding that they are paying fair taxes is a must.  There isn’t any other way to look at it and that study is well underway,” Higgs told the CBC Leaders Forum Wednesday evening in an apparent reference to the pulp and paper mill tax review

“Hopefully I’ll be back in government but whoever is there will see the outcome of that study.”

Progressive Conservative Leader Blaine Higgs said Wednesday industry has to pay fair taxes but he has not yet seen the updated valuation done on the province’s mills. (CBC)

Property assessments at the mills, including two in Saint John and one each in Edmundston, Atholville, Nackawic, and Lake Utopia, were lowered $130.7 million by Service New Brunswick in 2013 because of an international slump in pulp and paper markets.  

That saved the group $5.9 million per year in property tax, about half of which was paid to their host communities.

Mills were being re-inspected 

In 2019 Service New Brunswick announced it was “re-inspecting” the mills to see if markets for paper products had improved enough to undo some or all of the tax relief,  an issue of significant interest in the mill communities. 

The results had a preset deadline of Sept. 1 this year, which by chance fell directly in the middle of the election campaign, but so far Service New Brunswick is not saying what its “Heavy Industrial Team” of assessors found after more than a year of study.

Service New Brunswick assesses all property in New Brunswick for tax purposes and surprised municipalities in 2013 by a decision to cut the tax value of provincial pulp and paper mills by $130.7 million, which is more than 50 percent. (CBC)

CBC News was told a meeting would be held Thursday afternoon to discuss the mill findings, but no update was provided by the end of day.

Earlier this year Blaine Higgs said he is the one who asked for the review and said property taxes on them should go back up if markets have changed.

“I have said these very words to the department: I want the same conditions looked at that caused those rates to go down and compare markets today,” said Higgs  

“Whatever conditions were set then and if they’re different, then we should be applying that same logic and the rates should change accordingly.”

A reduction in property tax 

The pulp and paper mills, three owned by JD Irving Ltd., two by the AV Group, and one by Twin Rivers, were assessed to be worth $248.6 million as a group in 2012, according to information compiled by the website propertize.ca.  They were taxed by the province and their host municipalities on that amount.   

The following year Service New Brunswick cut their assessed value to just $117.9 million. That drove annual property taxes they had to pay from $11.2 million down to $5.3 million.

The paper mill in Edmundston was one of six in the province that received substantial property assessment reductions seven years ago. It cost the city over $700,000 in reduced tax revenue in the first year. (CBC)

Nackawic, which lost $450,000 in revenue, raised property tax rates 4 percent to deal with the shortfall.  In Atholville the village budget lost $360,000 and the council increased property taxes 10 percent in response.

Saint John lost $1.5 million in tax revenue and Edmundston just over $700,000 from the changes.

The study had to be completed by Sept. 1 to feed into tax base calculations the province uses to set 2021 grant amounts for municipalities that are released in the fall.

See more HERE.

 

 

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