Municipalities seek better consultation with N.S. after non-resident tax climbdown

The Nova Scotia Federation of Municipalities is pleased the provincial government backed away from a proposed non-resident property tax, but is concerned about a new non-resident deed transfer tax.

Cape Breton Regional Municipality Mayor Amanda McDougall, who is also the NSFM president, said the deed levy, which is added every time a property is sold to a non-resident, is an infringement on municipal tax powers.

Premier Tim Houston last week scrapped the proposed annual non-resident property tax following an outcry that McDougall said could have been prevented by proper consultation with municipalities in advance.

"This is a prime example with the non-resident tax of how we could have avoided something if you would have listened to municipalities," McDougall said. "We could have offered some insight into this world of taxation, because that's our world. We know it well. We know what to touch and what not to."

The provincial government has said the deed transfer tax, which was also introduced in the spring budget, will remain.

McDougall said municipalities want to be consulted ahead of time on all provincial legislation that affects their finances.

"We want to make sure that, loud and clear, there needs to be some sort of tool implemented into these conversations that includes municipalities in the consultative phase, not as a reactionary mechanism," she said.

The fact that the province changed its mind on the non-resident property tax bodes well for negotiations with municipalities, the mayor said.

"I'm very, very confident that these conversations are going to happen, simply in response to what happened last week. So we saw our provincial government listen, respond and actually take back something that the community spoke out about."

The province is starting a wide-ranging overhaul of its financial relationship with municipalities, including a review of the Municipal Government Act that legislates what municipalities can do.

It is also revamping its services exchange agreement, which hasn't changed in more than 25 years and covers a variety of issues such as shared road costs, municipal grants and grants in lieu of taxes.

The province is also rewriting a memorandum of understanding that outlines how all those things work and is working on a new funding arrangement for the municipal financial capacities grant, which used to be known as equalization funding.

The PC government doubled that grant to municipalities last year after it was frozen for more than a decade, but said that was a one-time boost meant to tide municipalities over until a new, more permanent arrangement is made.

McDougall said municipalities would not have been formally consulted on all of those items if the NSFM hadn't pushed for an advisory committee.

However, she also said the province should open separate talks just with CBRM, because as the second-largest municipality in the province, CBRM has "unique needs and priorities."

The mayor expects that the province will work with CBRM, one way or another, McDougall said.

"I feel confident that with the NSFM and the work that they're doing ... CBRM is going to have an opportunity to have our voices heard."

The Municipal Affairs Department declined an interview request, but said in an email it plans to consult municipalities on a wide range of issues starting this summer.

It did not answer questions about the NSFM's call for better consultation on the non-resident deed transfer tax or CBRM's call for separate consultation on its priorities.

McDougall sent letters to the premier's office late last week, but has not yet received a response.

MORE TOP STORIES