New Brunswick Finance and Treasury Board Minister Ernie Steeves tabled an $11.3 billion budget on Tuesday, March 22, focusing on tax cuts and relief for renters.
As expected with all budgets, the government’s fiscal efforts are drawing mixed reviews from the opposition side of the legislature.
Steeves describes the 2022-23 budget, which projects a surplus of $35.2 million and $15 million in net debt as an effort to build upon his government’s past successes. “The steps we have taken with each successive budget have led us to this budget, where we are now building on success,” Steeves said. “We have been responsible with our finances and reduced the level of net debt. These accomplishments have been achieved despite managing through a global pandemic that no one saw coming.”
People’s Alliance of New Brunswick leader Kris Austin likes what he sees in the budget. “It’s a budget that’s hard to criticize,” he said. On the other hand, N.B. Green Leader David Coon said the budget failed to address the concerns of New Brunswick residents most in need, including affordable housing.
One of the surprise measures in Tuesday’s budget announcement revolved around limiting rent increases to 3.8 per cent annually.
That move appears to be a 180-degree turn for the government, which strongly opposed rent limits in the past. In an attempt to offset pressure on apartment owners, the budget includes a 50 per cent reduction in property taxes for three years for owners of apartment buildings and rental properties.
Austin said his party pushed over the past few years to eliminate double taxing of property owners and a wide-scale reduction on property taxes, so it sees the tax cuts as an essential step in the right direction. “I think it will be a good relief for homeowners, developers and landlords,” he said.
Coon, who welcomes the rental-increase limits, said he’s getting mixed messages on how long the reprieve will last. He said the finance minister told him the government could not eliminate the rent-increase limit without a review at the end of the year.
However, Coon said, Service New Brunswick sees it as only a one-year measure. He said his party would push for clarity. Unlike Austin, Coon opposes across-the-board tax breaks for property owners, saying the budget should focus on the province’s growing housing crisis.
As expected, Steeves’ fellow cabinet member Agriculture, Aquaculture and Fisheries Minister and Carleton Victoria MLA Margaret Johnson praised the budget. “I’m proud that the budget our government unveiled today (March 22) continues the progress we have made in building a stronger economy and vibrant communities while also improving health care and protecting our most vulnerable,” Johnson said. “Our population and economy are growing, we are investing more in New Brunswickers, and we are building on our success.”
Johnson said budget details are yet to come, which she will address when the government unveils specific projects and funding. “I know that some of the areas of concern in Carleton-Victoria include crime, taxation, property tax, as well as matters concerning transportation and infrastructure, health care, affordable housing and education. ”She encouraged New Brunswick to stay tuned for future announcements.
Highlights of Tuesday’s budget included the following.
- The projected surplus of $35.2 million for 2022-23, and a $15-million increase in net debt to reach $12.99 billion.
- Gas and diesel prices will increase on April 1 due to federal carbon-pricing requirements. In response, the New Brunswick government will provide about $40 million in personal income tax relief in 2022.
- Provincial property tax rate cuts will be phased in over the next three years, including a 50 per cent reduction for non-owner-occupied residential properties such as apartment buildings and other rental properties.
- Spending on affordable housing will increase by $6.3 million.
- The health-care budget is $3.2 billion, a 6.4 per cent increase over 2021-22.
- $38.6 million will be spent in the coming year to increase wages for human services workers, including in-home support and group homes.
Related to the ceiling on rent hikes, Austin and Coon expect increases imposed between Jan. 1 and the present will be rolled back to no more than 3.8 per cent, noting the policy is retroactive.
While most welcome the property tax cuts, not everyone sees them as a positive step, even apartment building owners, who, on the surface, seem to benefit most.
During an interview on CBC Wednesday morning, March 28, Willy Scholten, president of the New Brunswick Apartment Owners Association, doesn’t address the real problem of skyrocketing assessments. He said the rising assessments and a cap on rent increases eat away any benefits from the tax cut.
“Landlords will now be struggling with their business,” said Scholten.
On the other hand, Coon said, the significant tax break for apartment-building and other property owners takes money away from targeting the real housing problems. He said the government should direct those dollars to help low-income households, non-profit nursing homes, social care, and long-term care homes.
Coon said the 45 million projected loss through the tax cuts could go a long way towards supporting the construction of affordable housing by non-profit or cooperative organizations. “We have a terrible crisis with affordable housing that keeps getting worse,” he said.
Coon said some estimates show New Brunswick losing 1,000 affordable apartments a year as developers buy the building.
Over the past 12 months, Coon added, the waiting list for subsidized housing increased dramatically from 5,000 to 7,000.
He said the $6 million additional funding announced in the budget would not go far to increase available, affordable housing.
He noted the new jail in Fredericton costs $30 million by itself. Coon pointed to cooperative townhouses in Woodstock as an example of where to direct funding to help low-income individuals and families.
