New Brunswick municipalities will have to wait until 2027 for new revenue streams, a year later than the previous government’s promise. In the recent throne speech on Tuesday, it was stated that changes resulting from the government’s property tax system overhaul will be implemented for the 2027 tax year.
The current interim leader of the Progressive Conservative party, Glen Savoie, expressed concern over the slower pace of change compared to when his party was in power. Savoie mentioned that significant progress was being made before the last election, with the department actively engaging with municipalities for fiscal reform.
The current local government minister, Aaron Kennedy, confirmed ongoing discussions resulting in a $63 million boost in provincial funding for municipalities, including a $45 million capital renewal fund. Kennedy emphasized the importance of taking the time to revamp the property tax and assessment system properly rather than rushing the process to ensure it is more understandable for residents.
As part of the government’s municipal reform process outlined in a 2021 white paper, the second phase of fiscal reform was initially planned for the 2025 tax year. This phase aimed to enhance fiscal stability for local governments through potential changes to the property tax system, redirecting some cannabis revenue, and sharing traffic fine proceeds.
The first phase of fiscal reforms was implemented by the Blaine Higgs government in 2023, providing municipalities with more flexibility in setting tax rates for different property types. However, efforts to diversify revenues beyond this initial phase have stalled, leading to increased operational costs for local governments.
According to a 2024 report by Mount Allison University economist Craig Brett, New Brunswick’s municipalities are facing an annual funding shortfall of around $200 million. Green Leader David Coon criticized the provincial government’s decision to freeze property assessments in 2026, stating that it hampers municipalities’ ability to address affordability challenges effectively.
The Union of Municipalities of New Brunswick reported that the assessment freeze in 2026 would result in 82% of municipalities experiencing tax base growth below the Local Government Cost Index of 3.1%. Dan Murphy, the organization’s executive director, stressed the need for addressing the mounting pressures faced by local governments to support community development effectively.
Kennedy defended the 2026 assessment freeze as a necessary affordability measure for residents, allowing time for a comprehensive overhaul of the system. He expressed hope that local governments could avoid raising tax rates this year and make decisions that benefit both New Brunswickers and municipalities.
