Minister backs away from municipal financial summit

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Local Government Minister Glen Savoie is backing away from a financial summit he planned to host for New Brunswick municipalities to discuss property tax system changes and other possible financial reforms.

Municipal leaders were expected to gather for the summit last September, but the event was abruptly called off amid provincial election speculation. In December, Savoie told media that his government postponed the summit due to a “misalignment” between the expectations of the different stakeholders, but he planned to hold the summit in the new year.

On Wednesday, when asked about a timeline for the summit, Savoie told media that local governments want to be engaged throughout the process “instead of just having a one-point touchpoint.”

“We’re making sure that we’re increasing the amount of touchpoints with our stakeholders through this process, so to be able to build the roadmap together and make sure they’re engaged throughout the entire structural reform process is really where the municipalities told us where they want to be,” he told media at the legislature.

Green Local Government critic Kevin Arseneau described the government’s new engagement approach as piecemeal.

“It’s going to be conversations with different groups, different municipalities, and we’re going to end up having government controlling the message, government being able to promise things to one and not to the others,” Arseneau said.

New Brunswick’s francophone local governments first suggested the idea of a financial summit to then Local Government Minister Daniel Allain, according to Michelle Barclay, director of policy for the Association francophone des municipalités du Nouveau-Brunswick.

The association represents 30 francophone municipal governments.

Allain was dumped from cabinet last June, three months before the summit was to occur.

While local governments were disappointed the conference was postponed, Barclay says that “at this point in time now six months later, the conversations have continued and evolved, so there is no use for that summit in that format.”

Officials with the Union of the Municipalities of New Brunswick (UMNB) reiterated Wednesday their increasing concern over the delayed development of municipal financial reforms.

As many as 29 of the province’s 89 local entities are at risk of a budget deficit through to 2026, a report prepared by two economic experts revealed in December. These deficits could range from $664,000 to $2.8 million based on different expenditure growth projections.

Last January, New Brunswick folded its 340 local entities into 89 municipalities and rural districts as the first phase of municipal reform. Municipalities have been waiting since then for a new revenue model to support growing operating and capital costs.

On Wednesday, Savoie confirmed that new model will be in place by Jan. 1 as per the government’s municipal reform white paper.

If that doesn’t occur, Tantramar Mayor Andrew Black says some municipalities may need to cut more services and delay projects.

“We’ve already seen a little bit of that from municipalities in the province, so that trend may continue if there is not something in place,” said Black, who is president of UMNB, a 56-member municipal association.

“If things don’t change, there may have to be some kind of a stopgap solution until we get to the point where we can truly have that conversation of a fiscal framework.”

More transitional funding provided to local governments

Liberal Local Government critic Jacques LeBlanc expected to see mention of municipal fiscal reform in the province’s 2024-25 budget released Tuesday.

“It’s appalling and concerning because municipalities went through this rigorous municipal reform and the missing piece to the whole puzzle is the fiscal reform,” he said Wednesday.

“You might hear that the minister wants to meet (with municipalities), but the budget is where the proof is in the pudding.”

The Tory government included $4.7 million in the budget to support local governments and regional service commissions still transitioning to taking on more services. That’s up from the original $3-million transition fund the government put in place during the first phase of municipal reform.

While ongoing transition funding is welcome news, Black said that $4.7 million is not enough when dozens of local governments need to share the funds with 12 regional service commissions.

When asked if there was specific funding in the budget toward planning for fiscal reform, Savoie cited the transition funds available to municipalities and the regional service commissions.

“We have proven beyond a shadow of a doubt that we are committed to this reform,” he told media. “We’re going to go through fiscal reform.”

Some property tax changes have already been made by the Tory government to support municipal reform. Municipalities are now able to set their non-residential and heavy industry tax rate multipliers as high as 1.7 as opposed to a once fixed 1.5.

When asked about Savoie’s comments on the summit, UMNB executive director Dan Murphy said in an email that the group just wants the “results of fiscal reform.”