Industrial property assessment will be under scrutiny in New Brunswick during three days of public hearings in early September. A standing committee of the provincial legislative assembly is exploring whether equipment and machinery used in manufacturing and industrial processes should be factored into the assessed value of the property.
Earlier this year, an opposition member of the legislative assembly (MLA) withdrew his private member’s bill seeking that outcome through an amendment to the provincial Assessment Act, but then made a motion for the standing committee on law amendments to study the matter further. The committee has now been tasked with making recommendations on “whether to reduce or eliminate any property assessment or property taxation exemptions or benefits that apply to heavy industry”.
The cited exemptions apply to features and devices related to production processes within industrial facilities, such as equipment, machinery, systems providing power for industrial operations and crude oil storage tanks at refineries. All are commonly exempted from property tax in other jurisdictions throughout North America. However, the MLA’s motion underscores concerns that “public institutions such as hospitals have much higher assessments than many industrial properties”.
Despite the industrial focus, New Brunswick-based property tax consultants with Altus Group maintain that any move to expand the pool of assessable features within a facility will also have cost implications for commercial properties. “The most obvious effect would be higher taxes imposed on many commercial and industrial businesses and their operations,” Rob Newman and Mathieu Maillet concluded in a commentary on the earlier, since rescinded, private member’s bill.
The new impetus via the standing committee occurs within the context of New Brunswick’s minority government. With 22 seats, the governing Conservative Party enjoys a mere one-seat edge over the Liberal opposition’s 21, while the Green Party and People’s Alliance each hold three seats. Notably, both of the smaller parties supported the motion for the public hearings and standing committee report on industrial property assessment.
“These hearings will be of interest as ultimately there could be significant consequences to the taxpayers in New Brunswick,” Newman and colleague Justin Babineau observe.
“I encourage representatives of heavy industry and municipalities, taxation experts and other stakeholders in our province to provide us with input on the current taxation and assessment system as it relates to heavy industry,” says New Brunswick’s Attorney General and Justice Minister Andrea Anderson-Mason, who chairs the standing committee.