Fredericton councillors consider 5-cent property tax increase for households joining city

Property taxes could be going up for about 1,500 households that will fall under the jurisdiction of Fredericton as of Jan. 1, 2023.

But even with a proposed five-cent increase in the property tax rate for households set to join Fredericton as part of local government reform, they would still pay lower rates than their neighbours who were already part of the city.

Fredericton councillors agreed to the tax rate increase in principle during acouncil-in-committee open budget meeting at city hall on Monday afternoon. A final decision on raising the the tax rate for those residents will be made at a later budget meeting in November.

The inclusion of about 4,500new residents into the city of Fredericton comes as part of local government reforms, which sees several communities merged or absorbed into other larger municipalities.

Alicia Keating,the city's treasurer, said residents in areas set to be absorbed into Fredericton currently pay a property tax rate and then a standard road tax of 41 cents to the provincial government.

Keatingsaid those residents pay four different property tax rates, with some paying45.42 cents, some paying 46.59 cents, some paying 53.62 cents and some paying 57.86 cents.

"So depending on where you are in those annexed areas, you would pay a different rate," Keating said. "So for example, if you're in Pepper Creek on one side of the line in Pepper Creek, you're paying one rate. If you go down the street to another area, you're paying a different rate."

Therefore, the highest tax rate after the proposed increase would be $1.0386, below the $1.0565 "outside" rate charged to Fredericton households who receivefewer municipal services. Fredericton's "inside" rate for residents who have full access to services, such as water and sewer, pay $1.4086.

"So on a go-forward basis, the City of Fredericton will receive the property tax portion, andthe provincial government will keep that road tax portion and will continue to provide all services to the roads."

'All about fairness'

Speaking to reporters after the meeting, Coun. Henri Mallet, the city's budget chair, said increasing the tax rate for those residents makes sense as they'll be enjoying improved services.

"It's all about fairness, right?It's paying their fair share, right?" Mallet said, adding that they'll benefit from the expertise of city hall, representation by council and access to recreation facilities.

"If you look at the service that they get and the rate that they pay, it's still lower than our outside rate, much lower than our inside rate. So I think it's just to make it fair for everyone to pay their share."