Saint John Taxpayers Are Footing Too Much of the Bill for Heavy Industry

The City of Saint John has one primary source of revenue, and that’s municipal property tax. If a community is forced to fight for openness, transparency, accountability, and equity, the leaders we count on are not fulfilling their duties.

Advocating for your community, speaking up and seeking solutions to our challenges, and wanting our generational social issues to be addressed should not result in being singled out, targeted, and hammered by unlimited resources.

Telegraph-Journal, June 14, 2022

There are two sets of conversations that happen in our region. There are the private conversations where people quickly agree on the challenges and share frustrations, and there’s the public dialogue where people fear speaking up or pushing back for genuine fear of repercussions.

Balance and action.

That’s what the conversation is about when it comes to the question, ‘does the city receive its fair share of property tax?’ — most of us welcome Industry in Saint John. We know the good-paying jobs, community contributions, and Industry’s overall economic impact, but we cannot ignore that it comes at a cost.

Taxation is very complex, and, as you know, many forms of tax are paid by citizens, businesses, and industries. Over the last five years, we’ve seen a tug of war as the City of Saint John has lobbied for meaningful change to a broken 60-year-old tax system. While some changes have been achieved, they neither go far enough nor are they coming quickly enough.

Measure What Matters.

We also know that measuring the prosperity of a community with a singular focus on GDP has made a few vastly more wealthy. At the same time, the average citizen struggles to pay their rent, tax bill, water bill, put gasoline in their car, and navigate the growing cost crisis (inflation).

Many communities worldwide have adopted a broader focus on economic, social and cultural indicators to measure citizens’ overall well-being and quality of life.

Saint John has long played a role as host of the highest concentration of industrial activity east of Montreal, which benefits the greater Saint John region and the Province significantly. This comes with costs, impacts on quality of life, and, until recently, stagnated population growth and the Saint John tax base.

One-sided Benefits.

The ongoing expansion of the Port, while fantastic for our regional and provincial economy, will mean more trains, trucks, and activity in neighbourhoods where families live, children play, and small businesses operate. These benefits are one-sided if the citizens do not feel meaningful benefits in the services they receive, reduced property tax bills, and enhanced quality of life.

Simply put, industrial activity and citizens need to be able to coexist, and benefits need to be seen by all. Would you agree?

I’m also aware of the narrative about management and council in the City. While it’s true there are challenges, the last five years have seen

• best in class financial policies created,
• debt cut in half,
• reserves established,
• restructuring completed, and
• increased growth of the population and tax base.

If we’re going to single out the challenges, we must also acknowledge the contributing factors.

Single Income City

The City of Saint John has one primary source of revenue, and that’s municipal property tax. Not only does the Province of NB remove approximately $30 million per year in property tax from our City, but it also gets sales tax, corporate tax, income tax and many other sources of revenue. The Federation of Canadian Municipalities reports that for every 1 dollar in tax, municipalities receive 8 cents, while the Federal and Provincial governments receive 92 cents.

I’m not against capitalism, but governments should play the role of referee. That role needs to be reestablished to restore fairness, trust, and confidence that our governments understand their roles and demonstrate openness, transparency and the necessary leadership. Not one-sided, unbalanced and disproportionate subsidizing any group at the expense of taxpayer’s well-being.

I’ve been in political backrooms, and frankly, it confirmed for me that

• some have far too much influence, and
• many solutions perpetuate a status quo that threatens the sustainability of our City and Province and the well-being of our community.

Since 2016 when I became Mayor of this great City, we have lobbied for a more fair, open and transparent tax system. It’s 2022, and that’s not been achieved. Despite commitments from the Province to address the lack of balance in the system and recognize the financial responsibilities and disadvantages as a host community, what has been done continues to prioritize big business and centralized power in the Province.

Throughout our efforts to achieve meaningful change from our local MLAs and the Premier, and despite confirmation of $20 million in annual lost revenue, their actions have fallen far short of their commitments.

Saint John doesn’t receive fair tax revenue from Industry.

I understand that the position of industry players is that they pay more than their share, but there is evidence that this is not the case. I also know that the City of Saint John doesn’t have the resources or wouldn’t spend taxpayer’s money to hire lobbyists, communication teams, and consistently commission studies.

In 2017 the City of Saint John commissioned an analysis of taxation, commonly referred to as the Kitchen and Slack report. On both sides of the debate, parties have pulled out quotes to support their arguments. Taxation is complex, and the challenges and opportunities in the report need to be addressed comprehensively. Premier Higgs and Saint John MLAs promised comprehensive reforms, and despite repeated requests for clarity, none was provided.

Please read the report. There are so many questions that deserve to be answered.

1. Does it make sense that the Imperial/ Suncor refinery in Strathcona county, Alberta pays 10 times the municipal tax that the Irving oil refinery pays to Saint john?
2. Does it make sense that the Residential tax class pays 31% more than Industry? (2019)
3. Do the assessments for industrial sites make sense, and are they fair?
4. Does the City receive a fair share of the property taxes paid from industrial sites?
5. Do industrial sites pay comparable property taxes, are assessments similar and are comparisons relevant across the country?
6. Does it make sense that a Tim Hortons would pay more tax than a rail yard?
7. Does it make sense that the Regional Hospital would have a higher assessment than the combined assessments of 9 (nine) major industrial sites (2019)?
8. Does it make sense that between 2013 and 2019, combined industrial assessment went DOWN by 4%?
9. Does it make sense that similar residential properties in the City would have a property assessment 28% lower than suburban areas outside the City?
10. Does it make sense for city residents to shoulder the burden and risk associated with Industry without a proportionate share of the benefits?
11. Does it make sense that in 2019, of the $128 million collected in property tax, only approximately $12 million came from heavy Industry?
12. Does it make sense that the citizens of Saint John should be asked to accept increased industrial activity where the region and the Province see more significant benefits than the local citizens?
13. Does it make sense that the provincial and our local MLAs continue to ignore our calls for meaningful recognition of the contributions we make as a community?
14. Does it make sense that since 2008 approximately $275 million has been taken out of the City and added to Provincial coffers?
15. Does it make sense that the Provincial government refused to transfer their share of heavy industrial tax to the City, approximately 9 million dollars per year, that would have resulted in the same tax bill for Industry? It would have been the first phase of honest and fair tax reform.

Pro Balance.

I’m pro-business that is balanced with our community’s needs. I recognize the economic contribution of heavy Industry to not only the City but the Province regarding employment, investment and community outreach.

Saint John is unique, with the heaviest concentration of industry east of Montreal, and it’s crucial to restore equity in the tax system and assessments that people trust and have confidence in. Saint John does not receive an equitable tax revenue distribution from heavy Industry.

There has never been a more important time to prioritize economic, social, and cultural outcomes, resulting in a city that retains and attracts people to live, work and play here.

What we need most is for our Premier and local MLAs to help us find balance, implement meaningful solutions and play their role as referees between capitalism and the prosperity of the citizens they serve.

I’m a glass-half-full realist. I’m an optimist that believes in opportunities in our City and region. I also know how critical it is for leaders to address the challenges we face openly and transparently, focusing on driving outcomes. If a community is forced to fight for openness, transparency, accountability, and equity, the leaders we count on are not fulfilling their duties.

Tax fairness with heavy industry, balance, and action. That’s what the conversation is about. Most importantly, it’s about measuring beyond the economy and placing value on the well-being of the entire community.

Don Darling
Informed Citizen, Saint John, NB