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By Rob Newman, Director, Property Tax | February 12, 2021

New Brunswick (NB) property tax reform has been a hot topic over the last number of years. Many of us may recall a media storm in NB surrounding flyover imagery used for reassessments that was allegedly mishandled.

An uproar ensued…

Soon after, debate started over how to best reform assessment practice and responses, amongst others, included:

  • an extended appeal deadline at the time
  • an assessment freeze the following year
  • a proposed independent agency to oversee assessment
  • record volumes of appeals
  • a special examination by the NB Auditor General
  • and a number of  legislative changes

Some highly contested proposals, including one to tax machinery and equipment, haven’t gained traction to date. In contrast, more popular ideas such as the removal of what’s referred to locally as “double taxation”, whereby apartments or non-owner occupied homes get taxed at higher rates, were unfortunately blocked in the wake of the pandemic and crippled budgets.

NB’s high tax rates aside, our view is that some of the biggest opportunities for reform centre around what NB does differently than most. This article will outline some significant opportunities for improvement.

NB’s Complete Lack of Uniformity Provisioning in our Assessment Act

Lack of uniformity provisions in NB legislation deserves the top spot on this list. These safeguards, otherwise referred to as “equity” provisions, are commonplace across most of Canada and are a cornerstone of fair assessment practice.

Unfortunately, based on current NB legislation, there is no obligation on the assessment authority to assess two like properties in the same way. Yes, you read that right. There can be two very similar properties with two very different assessments. Yet, under the current system, you can’t argue that this is unjust. This is abnormal.

There are very few assessment regions within Canada whose assessment legislation does not include an equity provision. The only other province without any equity provisions in some form is the Province of Quebec. Some provinces provisions are better than others, but we don’t have to go far to find strong examples of uniformity in assessment legislation. For instance, Prince Edward Island’s “Real Property Assessment Act”, Section 28.1, under the heading of “Accuracy of assessment, proof of” states;

Subject to subsection (2), in any appeal to the Commission, the Minister shall demonstrate the uniformity of the assessment in relation to other assessments.

Newfoundland and Labrador’s, “The Assessment Act, 2006”, Section 17 (3), under the heading of “Assessment of real property” states;

In forming an assessment for the purpose of subsection (1) an assessor shall have regard to the assessment of other properties in the city or municipality being assessed to ensure that the taxation falls in a uniform manner upon the real property that is subject to taxation in the city or municipality.

The foregoing are examples of uniformity provisions with ample case law that reinforce the need for fairness in assessing one property equitably to another. It is not difficult to appreciate the merits of uniform assessment, yet NB taxpayers have no recourse as uniformity provisioning is absent from our legislation. The irony is a Supreme Court of Canada decision, Jonas v. Gilbert, from a case originating in Saint John, NB is often cited and reads;

Unless the legislative authority otherwise ordains, everybody having property or doing business in the country is entitled to assume that taxation shall be fair and equal, and that no one class of individuals, or one species of property, shall be unequally or unduly assessed

NB’s lack of uniformity provisioning is likely the biggest deficiency in NB’s assessment legislation. But it would be remiss if we didn’t address other reforms also considered to be worthwhile in NB.

Further Transparency of Assessment Data

It is recognized transparency in NB assessment data has improved in recent years. For instance, the release of the Property Assessment Online (PAOL) search tool ( a few years ago was a stride in the right direction. There are of course benefits to the public having access to assessment data, particularly considering scrutiny in recent years.

More opportunity remains in what is not released in NB. An example is the recently released 2021 assessments. To provide a little background, 2021 marks the first year where COVID-19’s implications on property values will be considered in assessments in NB. This is a result of the 2021 base date of assessment being January 1, 2021 after the virus’s proliferation in Canada.

In response, Service New Brunswick identified five property types to hold back for a later release to allow them time to investigate the impact of the pandemic.

The held property types included:

  • hotels, motels and resorts
  • shopping centres
  • restaurants
  • office buildings
  • airports

These notices summed some +/- 1,850 accounts and were released in late January of this year. For the most part, blanket reductions have been made to varying degrees by property type.

Seemingly, any analysis of the held assessments would be straight forward. The problem is that the data released loses meaning because key information is not made public. Most notably, in this example, the assessment roll released does not specify the property types. This is key information as it would allow, for instance a shopping centre owner, to look at all the shopping centres and see how assessments were reduced comparatively.

To further complicate this, there were also over 128,000+ notices that were also held and released at the same time as the COVID-19 held notices for completely unrelated reasons. So, isolating the COVID-19 affected properties becomes somewhat of an exercise in futility.

Were this in Nova Scotia, the public would have access to much more information. Not only could they access the property types, but they can also get data such as the classifications (i.e. residential vs. commercial), the building age, and the building size. Needless to say, all this data is absent on the assessment roll published in NB and there remains opportunity for continued improvements in transparency.

Recourse for Tax Classification Issues

In NB, assessable realty is classified as either residential or non-residential (i.e. commercial) while mixed-use properties are allotted a proportion of both. Residential classified properties are taxed at a lower rate and as such there is an implication on tax burden an owner faces due to classification. This can be particularly contentious with vacant lands. So, the question becomes; what happens when you disagree with a particular classification? Well unfortunately in NB there is no mechanism to do so. In fact, the legislation actually reinforces a lack of recourse. NB’s Assessment Act, Section 4(12) actually reads;

The Director’s determination under paragraph (1)(f) that real property or any portion of real property is used for commercial purposes or is residential property referred to in paragraphs (a) to (f) of the definition “residential property” is final and may not be questioned or reviewed in any court.

That is some pretty strong language and is unusual as in most assessment jurisdictions you can generally dispute classification through the appeal process or otherwise. Yet in NB it cannot be “questioned or reviewed in any court” so evidently the taxpayer is at a disadvantage here.

Remedy of Roll Release in Advance of Base Date 

A final challenge in NB is a rather new one. As a result of legislative change, the separation of the tax notice and the tax bill was rolled out this year. Historically, the tax bill and the tax notice were mailed together at the beginning of March with a 30-day appeal window. These assessments were valued as of January 1 for that given year. Previously the notices were mailed after the valuation date, which stands to reason as we should not expect assessors to have crystal balls and value in the future. 

With the separation of the tax notice the timeline is now quite different. The tax bill still comes in March, but the bulk of assessments are now mailed five months earlier in October. For 2021, assessment notices were mailed in October of 2020 and were to be valued as of January 1, 2021 (in the future). In fact, to have the roll ready, values would have been set in advance of the October mailing date. All this is relevant, as by the time the January 1 valuation date comes around the 30-day appeal window has long since expired.  

So, what happens if a property’s value drops after the appeal window and before January 1? Well, if the assessment authority hasn’t held the notice or doesn’t reissue one (both of which are done at their discretion) the owner is out of luck. The appeal window will have expired and the next opportunity to appeal will be the next year’s assessment under a separate cycle.  

Ultimately, the release of the assessment in advance of the base date is unusual and I am not aware of any assessment authorities in Canada who do this.  

To remedy this, there are many solutions, including:  

  • extension of the appeal deadline to at least the base date
  • a later release of the assessment notices
  • or a change of the base date altogether to one in advance of release of the notices

Change is Possible

In summary, public sentiment appears to be one of reform as it pertains to assessment practices in NB. Various bills and motions have been tabled and some have materialized as amendments to acts and regulations, so change is possible.  

There are many opinions out there on where to go from here as NB certainly does many things differently. Fairness should be a central focus, and much can be learned from other jurisdictions. Hopefully, reform will continue in NB and ease some of the concerns covered in the news.  

An earlier version of this article appeared in the February/March CPTA newsletter.

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