New tax and deal-making options could open up for New Brunswick’s municipalities through proposed amendments to the provincial Local Governance Act. Newly tabled legislation in Bill 14 includes provisions that would allow local governments to levy a vacant property tax and/or enter into beneficial agreements with development proponents.

The proposed amendments would convey authority for local government to enact either mechanism, but many of the other details are left for future regulations. For vacancy tax, those regulations would define what constitutes a vacant property, establish the allowable tax rate and cover a range of other specifications for exempt property classes, notification, appeal and payment processes.

Municipalities would be permitted to channel the revenue from vacant property tax to four designated purposes:

• use or development of vacant properties;
• economic development;
• housing development; and/or
• the administrative costs of levying the tax.

“Local governments have been asking for more tools to help put vacant properties to better use,” says Aaron Kennedy, New Brunswick’s Minister of Local Government.

“By empowering municipalities to address vacant and underutilized properties, we can encourage reinvestment, stimulate economic growth and unlock new opportunities to create more vibrant, prosperous and resilient downtown communities across New Brunswick,” maintains Patrick Richard, president of Downtown New Brunswick, which represents business improvement associations (BIAs) throughout the province.

Under another proposed amendment, local governments could authorize a community benefit agreement with a development proponent via a Council resolution. Such agreements would then establish a framework for the proponent to convey funds earmarked for municipal amenities or services and/or to deliver in-kind benefits such a commitments to local hiring and training.

The mechanism is intended to offset the costs and impacts that new development will impose on the municipality and immediate vicinity of the project. Future regulations would spell out the categories and scale of projects that could be captured, the types of benefits that could be extracted, allowable uses of collected funds and administrative procedures for the agreements.