Evidence landlords cite in campaign to end N.B. 'double-tax' comes under scrutiny

Some landlords are renewing their call for the New Brunswick government to cut property tax rates on rental buildings in the province but they are offering little evidence to supportclaims that they currently"pay property taxes 251 per centhigher than the Canadian average."

On Jan.28, Service New Brunswick issued the last batch of property assessments for 2022, including new assessments on several hundred apartment buildings.

Valuations on some buildings have jumped 50 per cent and more from last year. On Friday, that reignited a call by landlords for the province to cut rental property tax rates significantly in next month's budget to save a big jump in their tax bills.

"The New Brunswick Apartment Owners Association is calling on the Province to implement aformula that reduces the provincial tax rate so that landlords and tenants pay the same taxes asbefore these major increases,"said association president Willy Scholten in a written statement.

For several years the association has claimed, wrongly, that New Brunswick is the only province to subject apartment buildings to both provincial and municipalproperty taxes.Several provinces engage in the same practice but Friday the group also made it clear it wants what itcalls New Brunswick's "double tax" ended for good.

"We are also calling on the Province to continue this formula of offsetting assessment increases in future years until this double taxation is finally eliminated," reads the statement.

New Brunswick does have higher tax rates on rental properties than many jurisdictions, but that does not necessarily lead to higher tax bills.

New Brunswick also has lower property assessments than most jurisdictions. Even with recent assessment increases,the tax bills landlords pay on rental properties in New Brunswick are often similar to places with much lower tax rates.

In Saint John,Killam Real Estate Investment Trust New Brunswick's largest landlord owns several buildings including the 52-year-old Fort Howe apartments.

The 153-unit building is in line for a 2022 property tax bill of $217,000.That's almost the same as the $213,000 property tax bill Killam is facing on a 146-unit high rise of the same vintageon Oak Street in Dartmouth, N.S.

Property tax rates on the building in Saint John are more than double those in Dartmouth.But the assessed value of the Dartmouth building is more than double that of the building in Saint John. The two elements largely offset each other and as a result, the property tax bills for each building are nearly identical.

The New Brunswick Apartment Owners' Association includes only tax rates when it claims taxes paid on rental properties in New Brunswick are higher than elsewhere, an issue it rarely makes clear in its materials.

It also mostly compares New Brunswick tax rates to large urban centres with Canada's highest property values and lowest tax rates.

In the nine cities outside of Atlantic Canada it uses to calculate its 17-city "Canadian average" tax rate, all nine are major cities including Toronto, Vancouver, Victoria, Montreal, Winnipeg, Calgary, and Edmonton.

Tobin Haley is an assistant professor of sociology at the University of New Brunswick and a member of the New Brunswick Coalition for Tenants Rights.

She saidthe comparison of New Brunswick tax rates to those in major Canadian cities does little to prove they are too high and doubts cutting tax rate on apartment buildings would benefit renters at all.

"This cannot stand in for good research," said Haley

"Until those numbers are justified, until they have demonstrated to be systematically selected until, you know, there is a conversation about what it means to compare Fredericton to Toronto, It cannot inform policy making if we are really to take an evidence-based approach."

In November the apartment owners group distributed a flyer to tenants that caused a stir at the legislaturewith a suggestion landlords in Toronto pay significantly less tax on buildings than they do.

"Property taxes in New Brunswick are 2.5 times higher than in downtown Toronto," said the flyer.

People's Allianceleader Kris Austin was alarmed enough to raiseit in question period.

"Downtown Toronto, for crying out loud," said Austin.

"And then we wonder why tenants can't afford rent and we wonder why there's a housing crisis."

But the Toronto comparison was of tax rates, not tax bills.

Scholten, who constructedthe flyer, acknowledged in an interview he does not know if a property tax bill on a Toronto apartment building would be higher or lower than on a similar building in New Brunswick.

"Saying that they're twoto 2.5 times higher than Toronto is really meant in a comparative basis because the rates are what the rates are," said Scholten. "But you're right, if you're saying what is the actual property taxes that are paid, I really can't tell you."

Several Canadian cities with apartment building tax rates higher than communities in New Brunswick, like Windsor, Sudbury, Sarnia and others are not included in the association's Canadian average calculations.

Progressive Conservatives promised in the 2018 election campaign it would "eliminate double taxation" in combination with municipal reform.Finance Minister Ernie Steeves announced a plan to begin reducing provincial property tax rates in March 2020 but cancelled the initiative in May 2020, citing pandemic uncertainty.

In November 2021, Local Government Minister Daniel Allain said broad municipal property tax reforms would proceed as part of local government reform, but not until the 2024 fiscal year.