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Province distributes tax assessment base and unconditional grant information for City of Saint John

06-Oct-2020

The Province distributed the 2021 tax assessment base and unconditional grant information to municipalities today.   

 

COVID-19 has had, as was anticipated, a significant impact on municipalities across the province, including Saint John. While there has been some level of growth in the City’s residential tax base this year, the non-residential tax base from sectors such as retail, manufacturing, hotel, and restaurant has decreased. Saint John is home to many commercial enterprises. 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.

 

Early this year, after the onset of COVID-19, the City was quick to implement short-term cost-reduction plans to control spending across all services. This early action has enabled the City to maintain a balanced budget through to the end of 2020, setting us in good standing for 2021 and 2022.

 

The position municipalities find themselves in this year underscores the importance and need for good financial planning, strong budgetary controls and reserves for the “rainy days”.

 

The City prepared its 2021 draft budget in August this year, and included risk mitigation strategies to deal with the very real possibility of stagnant growth.  Therefore, Saint John remains ready for 2021. The financial impacts of COVID-19 will not require the City to further adjust its implemented sustainability plan.  

 

The City has a financial strategy for the next 10 years through the creation of the Long-Term Financial Plan and associated financial policies. We now have measures in place to address financial risk, including significant financial shocks such as those experienced by COVID-19. Examples include the build-up of financial reserves, the Capital Expenditure Policy and the Wage Escalation Policy.

 

In Saint John, the tax base remains fairly consistent with the previous year (2020), increasing by 0.12 per cent. This represents new tax revenue of $147,660, which includes adjustments for both residential assessments (which increased by approximately $31.8 million) and non-residential assessments (which dipped by roughly $23 million).  Initial budget planning for 2021 had assumed a growth rate of 1.5 per cent but also considered options for the possibility of stagnant growth due to the pandemic.

 

Today’s numbers also show that Saint John’s unconditional grant for 2021 from the Province has increased by $1,024,646.  The unconditional grant is calculated using many factors but it is fair to say that the City’s tax base is a key determinant in the size of the unconditional grant.

 

The City will incorporate this latest information in the draft 2021 budget and provide an update to the Finance Committee on October 21, 2020.

The City also continues to pursue opportunities as identified in the Sustainability Plan to address comprehensive property tax reform and regional cost sharing to further growth within Saint John.

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