They Couldn’t Believe what we were telling them.
Picture of the Saint John Oil Refinery from the Wall Street Journal.
A few weeks ago I had the opportunity to attend the Federation of Canadian Municipalities (FCM) annual conference which was held in Regina, SK. As a first term councillor in the middle of a 10-year strategic planning process I was excited to get the opportunity to sit in sessions and have discussions with councillors, mayors, and municipal staff from across the country that could inform me with better data, experiences, and research. Over the 5 days I logged 8 one-on-one meetings, dozens of conversations, and hours of session time doing that learning and engagement. What I walked away from that conference with was a lot of resolve around an issue that seems to have faded from the spotlight; comprehensive tax reform.
Many people know me more from my role in the community as a housing activist or community organizer so I can understand that some would be confused by that takeaway. It seems that no one can believe the realities we have as a municipality here in Saint John. If we want to even begin to be able to build a city that provides better services to people, supports robust housing action, tackles climate action, and helps keep things affordable we are going to need to take the handcuffs this province puts on our city that no other province would.
Every city councillor/mayor I spoke with reside in a city where the closer you get to the core of the city, the more highly assessed the properties are on aggregate. In other words, if you took a 3000 square foot Tri-plex and put it near the middle of the city or you put it 10 mins away you can expect the value of that property to be worth more downtown. This rewards cities in unique ways with more fiscally solvent inner city neighborhoods that create enough municipal income to provide better services and quality of life offerings. This is not the case in our city however as communities like the Waterloo Village and the old north end have many buildings that would be assessed at hundreds of thousands of dollars more if they were in Quispamsis or even the other cities Atlantic Canada. Why does this matter? Because the city of Saint John faces the same costs that other cities do on service delivery but we lack a similar assessed value. This forces the tax rate to stay astronomically high in order to achieve that balance which causes a depreciating effect on people fixing up their properties or investing in our city.
This isn’t the only feature that makes Saint John unique. The presence of a lot of heavy industry also ought to provide our city with major advantages that it does not. We all know that heavy industry provides decent paying jobs and produces a lot of the things our society needs to function. Certainly when we talked to other councillors about this, their heavy industry was considered to be at least a break even value proposition if not an advantage. When we told the others at the conference about the fact that our regional hospital pays more property tax to the city than one of the countries largest export companies they were blown away. And when we told them about the province continuing to underassess or provide major tax breaks to mills and other industrial complexes against our will they just shook their heads. The city of Lethbridge is a perfect example. With a CMA of around the same size and with a city proper population around 100,000 and with a good collection of heavy industry, their city budget is nearly twice as much as ours, they have barely any infrastructure deficit, incredibly low debt, and fully funded asset management plans. They reap a lot of benefits in response to hosting that industry. Certainly the councillors from there that I spoke with did not mention any ongoing feud of over tax recovery and opportunity cost to the city.
Meanwhile, as the Gardiner Pinfold report and other reports have revealed to us here, we are missing out on 30+ million dollars per year in funding just for being in this province. Here we are in the middle of this province's most comprehensive municipal reform since the 1960’s; staring an opportunity to right the mistakes of the past and ensure the province's municipalities can afford to offer the world a 21st century city, and the province offers a simple industrial tax class as a concession. But here is the kicker, this industrial new tax class, which yes we asked for and need, is tied to the residential tax rate. Which means, as much as we try, if we give residents a break on their unruly tax bill, we have to give it to industry as well. Sure, we can now increase the multiplier that industry pays to 1.7, but the province has ensured that if residents get a break, industry gets a break. So who is really winning? Industry. Jim Irving recently published an editorial stating that Mr. Darling had it wrong on tax reform. Well from where this councillor sits, I think Mr. Darling and this current city council which continues to call for property tax assessment reforms and comprehensive tax reform are the norm across this country. If any owner of heavy industry thinks they can move anywhere else in this country and get the deal they have here they should reach out and prove it. They can’t and no other city would ever offer it. It’s time this provincial government face the facts and do what every other province does; ensure heavy industry contributes their fair share to the communities they belong. Until this is done, this councillor will view this current municipal reform effort as a half measure and a renewal of this province's defiance toward the city that produces 25% of its GDP.