If you own property in New Brunswick your 2017 assessment notice is in the mail and is likely to hit your desk later this week. There will be some surprises this year. Apartment and camp ground owners… sorry! The number you are looking at isn’t a mistake… both were re-assessed this year… Before you call the Premier’s office, grab another cup of coffee and give me a call and I’ll share what I know so far!

We’ll be compiling some data over the next few days and will have some more insights on what has changed but until then there has been some talk of reforms to the New Brunswick property tax system of late and there is one important issue that hasn’t been brought up but should be.

Equity, Uniformity, Fairness – The Missing Link
Ignoring the process part of the system (which is largely a function of resources committed to it) and the “my tax bill is too high side of it” (which is a function of municipal spending), the assessment part of the system which is governed by the New Brunswick Assessment Act generally represents the gold standard in assessment. New Brunswick has a market value system, requires that values be updated annually, and has a current base date (January 1st of the current year) so taxes are allocated based on the most current economic conditions. There is however one glaring omission and that is a provision to allow owners to challenge their assessment on the grounds their assessment is higher than other properties.

How can this be? Certainly equity and fairness is something all stakeholders would want in a system of taxation. During question period on December 13th, the current government confirmed that they want a “system of taxes that is relevant, that is fair, that is progressive…” During the discussion the word “fair” was referenced six times along with the word “equitable”. Similarly in 2012 when reforms were last made to the Act, the White Paper that was published referenced fairness 25 times, and the word equitable 12 times.

If we go back further… much further… to 1963… The New Brunswick Royal Commission on Finance and Municipal Taxation chaired by Mr. Edward Byrne (Byrne Commission) set out its vision for an equitable system of property assessment:

“The accurate assessment of property is as difficult as any tax administration problem. And it is impossible to have equitable taxation without accurate assessment. A primary aim in levying any type of tax should be to treat similarly-situated taxpayers similarly … In order to accomplish this, all property must be valued on the same basis … The only satisfactory basis is market value. If there are variations among different properties in the ratio of the assessed value to the actual market value, the taxes imposed by applying a uniform rate will be inequitable. The owner of property with an assessment ratio that is higher than the ratio for another owner will bear an unjustly heavier burden.”*

Nonetheless, despite more than 50 years of consensus that a fair and uniform property tax system is in the public interest, New Brunswick is among the few jurisdictions in North America that doesn’t give tax payers the right to seek tax relief on the grounds that their assessment is not equitable with other properties.

How is this possible? This requires some speculation. Before the Province took over the assessment process from municipalities during the mid 1960s assessments were ad-hoc. Assessment Levels (the ratio of assessed value to market value) varied by municipality from 23% in York County to 102% in St Andrews and most municipalities had at least one piece of special legislation setting municipal taxes for its major tax payers. When the modern Act came into force, legislators intended to bring consistency to the process and required that:

“all real property shall be assessed at its real and true value as of January 1 of the year for which the assessment is made.”

It can be difficult to know the exact intent, but knowing that the legislature was seeking a fair system of taxation that would ensure that assessments were uniform within and across municipal units it stands to reason they were assuming that the Assessment Services Division would be able to consistently achieve an assessment level at 100% of market value across all municipal units. At the time, the Act also included a provision for owners to appeal other assessments in the municipality providing at least a partial remedy for owners assessed at levels higher than their neighbors.

Legislators may have felt these provisions would be sufficient to ensure an equitable assessment roll, however the task of assessing tens of thousands of properties isn’t an easy one particularly when it comes to commercial properties. It requires developing models for all the different types of properties and for all of the individual neighborhoods in the Province and it isn’t always easy to return an assessment roll where all of the properties are assessed at 100% of market value. In fact, looking at statistics contained in SNB’s annual report from 2006-2014, the commercial level of assessment provincially has ranged from a low of 89% in 2008 to a high of 93% in 2010. The practical implication of this is that a property owner assessed at 99% of market value has no remedy for a reduction despite all other properties being assessed on average, at 89% to 93% of market value. Even had the owner been willing to appeal all of the other commercial assessments in the municipal unit, that option was removed when the Act was amended in 2008.

In the past, the New Brunswick Court of the Queens Bench has ruled there is no remedy within the Act or at common law for owners to have their assessments reduced on the grounds their assessment is unfair relative to other properties. Rather than hoping the Court of Appeal will provide a remedy at some distant future date, lets ask the legislature to give assessors and the Assessment and Planning Appeal Board the tools to ensure tax payers truly have a fair and equitable property tax system when they review the Act this year.

*Excerpt taken from Report of the Auditor General – 2005

Written by Andre Pouliot, Vice President of our New Brunswick operations and Senior Manager of our Property Tax Division. For more information about our counselling services, feel free to contact Andre at (902) 429-1811 or