Jul 19

New Brunswick getting out of property assessment business following controversy: premier

The New Brunswick government says it is getting out of the property assessment business, a statement that comes less than a week after it said it would investigate following allegations that more than 2,000 property owners have been given improper and inflated tax bills.

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READ MORE: New Brunswick premier says property tax scandal will be investigated

In a news conference on Monday, N.B. Premier Brian Gallant said it would introduce an independent agency to oversee property assessment. He said it came after recommendations from several people and organizations, including the Canadian Taxpayers Federation.

Gallant said in 2011 and 2017, “arbitrary formulas” were used to estimate property values.

“Although Service New Brunswick employees may have had good intentions in applying arbitrary formula as in 2017, they did it to reduce the assessment of the computer-generated assessment,” Gallant said.

He added in the case of 2011, the assessments were subsequently corrected.

“Nonetheless, these actions have still undermined the confidence New Brunswickers place in the property tax assessment process. There’s clearly a problem and we’re going to fix it.”

During the same conference, Service New Brunswick Minister Ed Doherty apologized for the increases.

“I sincerely apologize to all New Brunswickers,” Doherty said. “As government, we will do everything we can to rectify the situation.”

READ MORE: NB sees record number of property assessment appeals in with more likely to come

Increases in property assessments were reported last month when some property owners told Global News they had received bill increases in the hundreds of dollars. A Rothesay, N.B., man said his assessment was up 30 per cent from 2016, costing an additional $616.97.

When thousands of incorrect assessments were reported, the government cited human error as the culprit, a statement Gallant backs.

Gallant said an independent commissioner would, by August 2017, report back on all policies and procedures related to recent assessment processes but also look back at errors at calculating property tax assessment values for the past seven years. The process will be overseen by a former federal appeal court judge.

For example, in 2013, there were 7,800 errors against 44,400 reassessments, an 18-per-cent error rate.

READ MORE: Property tax hikes ‘rubbing salt in the wounds’: NB apartment owners

The hikes in assessments, Gallant said, was a result of findings in February 2017, when officials found some properties with high assessment increases would be unable to undergo quality control procedures before the billing cycle occurred. To lower the assessments, the “arbitrary formula” was developed.

“The assessors said to themselves, unfortunately, that it was pretty high and they should do some quality control but they didn’t have time, and that’s the big-time unfortunate part of it, so they provided an arbitrary formula to reduce the assessment that was calculated by the computer,” Gallant said.

The premier said the assessments on the properties would have still gone up, but a computer assessment “had it going up a lot more.”

He said using the formula was “inappropriate,” but “it would seem,” used to reduce the assessment produced by the computer.

Not satisfied

Opposition Finance Critic Bruce Fitch told reporters the party still isn’t satisfied.

READ MORE: NB realtors, government watchdog calling on property assessment changes

“You heard the premier say it a number of times – inappropriate actions – and you heard the minister apologize,” Fitch said.

“So you see a government here in full crisis mode and it’s unfortunate the minister didn’t take that next step, or the premier didn’t take that next step and have the minister resign today.”

In addition to conducting an internal independent investigation and looking into creating an agency to handle property assessments, the government says it will also be removing the deadline for New Brunswickers to report assessment errors. Those requesting a review – which recently had a deadline of March 31 –will now have until August.

Fitch said although extending the deadline helps, more needs to be done.

“People who have questions about their property tax assessment … they should have the opportunity to ask those questions as well,” Fitch said.

Gallant also said anyone who has their assessments lowered based on recommendations from the independent review will get any over-payment back with interest.

Kevin Lacey, Atlantic director for the Canadian Taxpayers Federation, said extending the review was a “fair” decision.

“They’ve done so in a very generous way to ensure that everyone who wants to appeal their assessment can,” said Lacey, adding he hopes New Brunswickers appeal their assessments to ensure the taxes they pay are “fair and justified.”

READ MORE: Some New Brunswick residents shocked by large property tax assessment hikes

‘Separate from government’

Lacey’s organization originally called for an independent process for the assessments. He told Global News on Monday that having the agency would mean more reliability.

“The biggest change is [we’re] going to have an independent assessment organization that is separate from government and more importantly, separate from government interference in the whole system,” Lacey said.

“[It] will make the assessments more accurate and believable that they’re going to be receiving.”

The results of the review, which Gallant said is expected to be completed later this year, will then be used to look into what needs to be changed by the new agency.

Gallant said legislation will be introduced during the fall session of the legislature to establish the new agency.