Saint John Sees Stagnant Tax Base Growth

Saint John’s hopes for continued tax base growth this year have been dashed by the COVID-19 pandemic.

City staff had once again anticipated a 1.5 per cent growth rate, but provincial numbers released this week show the tax base grew by just 0.12 per cent. That represents new tax revenue of just $147,660.

The news did not come as a shock to Mayor Don Darling, who said he was disappointed but not surprised by the stagnant growth.

“In fact, it was conversations that I had with the city manager back in March that we should prepare for this potential outcome,” said Darling during a phone interview.

While the city’s residential tax base grew by nearly $32 million this year, the non-residential tax base fell by $23 million. It comes as many businesses saw lower revenue than normal due to the impacts of the pandemic.

“A business’s revenue is a consideration in tax assessments and with revenue down, Saint John is subject to a significant decrease in non-residential tax base,” said the city in a news release.

While tax base growth was stagnant in the city, the same cannot be said for outlying municipalities.

The tax base in Rothesay grew by 3.1 per cent, compared with 2.8 per cent last year. Quispamsis saw its tax base increase by 2.8 per cent, down slightly from three per cent last year. The tax base in Grand Bay-Westfield climbed by 1.7 per cent, compared with 1.8 per cent last year.

“Largely those communities have residential tax base. Residential tax base wasn’t hit as hard by COVID and by assessment reductions,” said Darling.

The province has increased the city’s unconditional grant by just over $1 million to $18.2 million, but the lower-than-expected tax revenue means a revenue shortfall of around $715,000.

Despite the revenue shortfall, Darling said the city will still be able to balance the 2021 budget without any further sustainability cuts.

“It will mean some impacts to our reserve funds and some of the way that we were going to fund those reserves, but we’ll balance our budget,” he said.

The city’s finance committee will receive an updated draft 2021 budget at its meeting on Oct. 21.