Bill 120 - An Act Respecting Community Funding

BILL 120

An Act Respecting Community Funding

His Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

Enactment of the Community Funding Act

1 The Community Funding Act is enacted as follows:

DEFINITIONS AND INTERPRETATION

Definitions

1 The following definitions apply in this Act.

“community” means a local government or a rural district. (communauté)

“current year” means the year for which the equalization grant is to be determined. (année en cours)

“Fund” means the Regional Services Support Fund established under section 14. (Fonds)

“heavy industrial property” means heavy industrial property as defined in the Assessment Act. (biens industriels lourds)

“local government” means a local government as defined in the Local Governance Act. (gouvernement local)

“Minister” means the Minister of Local Government and Local Governance Reform and includes any person designated by the Minister to act on the Minister’s behalf. (ministre)

“municipal tax base” means the total of the following amounts, computed on or before October 15 in the previous year or as soon afterwards as the circumstances permit: (assiette fiscale municipale)

(a) the total assessed value of all real property liable to taxation under the Assessment Act in a municipality, excluding

( i) real property owned by the municipality,

( ii) real property of utility commissions owned by the municipality, and

( iii) real property referred to in paragraph (b.1) of the definition “real property” under the Assessment Act;

(b) the assessed value of all real property in a municipality owned by the Crown in right of the Province;

(c) the assessed value of real property in a municipality owned by the Crown in right of Canada, computed in accordance with section 2;

(d) the assessed value of real property in a municipality that is exempt from taxation under paragraph 4(1)(l) of the Assessment Act; and

(e) the assessed value, computed in accordance with section 5, of any of the following non-residential property in a municipality referred to in paragraphs (a), (b) and (c):

( i) heavy industrial property; and

( ii) all other non-residential property.

“non-residential property” means non-residential property as defined in the Assessment Act. (biens non résidentiels)

“previous year” means the year before the year for which the equalization grant is to be determined. (année précédente)

“provincial tax base” means the sum of all municipal tax bases, rural community tax bases and rural district tax bases. (assiette fiscale provinciale)

“regional service commission” means a regional service commission established under the Regional Service Delivery Act. (commission de services régionaux)

“rural community” means a rural community within the meaning of the Local Governance Act and includes a regional municipality. (communauté rurale)

“rural community tax base” means the total of the following amounts, computed on or before October 15 in the previous year or as soon afterwards as the circumstances permit: (assiette fiscale de la communauté rurale)

(a) the total assessed value of all real property liable to taxation under the Assessment Act in a rural community, excluding

( i) real property owned by the rural community,

( ii) real property of utility commissions owned by the rural community, and

( iii) real property referred to in paragraph (b.1) of the definition “real property” under the Assessment Act;

(b) the assessed value of all real property in a rural community owned by the Crown in right of the Province;

(c) the assessed value of all real property in a rural community owned by the Crown in right of Canada, computed in accordance with section 3;

(d) the assessed value of real property in a rural community that is exempt from taxation under paragraph 4(1)( l) of the Assessment Act; and

(e) the assessed value, computed in accordance with section 5, of any of the following non-residential property in a rural community referred to in paragraphs (a), (b) and (c):

( i) heavy industrial property; and

( ii) all other non-residential property.

“rural district” means a rural district as defined in the Local Governance Act. (district rural)

“rural district tax base” means the total of the following amounts, computed on or before October 15 in the previous year or as soon afterwards as the circumstances permit: (assiette fiscale du district rural)

(a) the total assessed value of all real property liable to taxation under the Assessment Act in a rural district, excluding real property referred to in paragraph (b.1) of the definition “real property” under that Act;

(b) the assessed value of all real property in a rural district owned by the Crown in right of the Province;

(c) the assessed value of real property in a rural district owned by the Crown in right of Canada, computed in accordance with section 4; and

(d) the assessed value, computed in accordance with section 5, of any of the following non-residential property in a rural district referred to in paragraphs (a), (b) and (c):

( i) heavy industrial property; and

( ii) all other non-residential property.

Computation of the municipal tax base

2( 1) For the purposes of computing the municipal tax base in paragraph ( c) of the definition “municipal tax base”, the assessed value of real property in a municipality owned by the Crown in right of Canada shall be determined by the Minister in accordance with subsection (2).

2( 2) The assessed value of real property in a municipality owned by the Crown in right of Canada shall be determined by the Minister by making

(a) adjustments to the assessed value of the real property to reflect the second preceding year’s property value determined under the Payments in Lieu of Taxes Act (Canada), and

(b) any other adjustments as required in respect of real property reclassifications and alterations and other modifications to real property so as to reflect the anticipated property value determined under the Payments in Lieu of Taxes Act (Canada).

Computation of the rural community tax base

3( 1) For the purposes of computing the rural community tax base in paragraph ( c) of the definition “rural community tax base”, the assessed value of real property in a rural community owned by the Crown in right of Canada shall be determined by the Minister in accordance with subsection (2).

3( 2) The assessed value of real property in a rural community owned by the Crown in right of Canada shall be determined by the Minister by making

(a) adjustments to the assessed value of the real property to reflect the second preceding year’s property value determined under the Payments in Lieu of Taxes Act (Canada), and

Computation of the rural district tax base

4( 1) For the purposes of computing the rural district tax base in paragraph ( c) of the definition “rural district tax base”, the assessed value of real property in a rural district owned by the Crown in right of Canada shall be determined by the Minister in accordance with subsection (2).

4( 2) The assessed value of real property in a rural district owned by the Crown in right of Canada shall be determined by the Minister by making

(a) adjustments to the assessed value of the real property to reflect the second preceding year’s property value determined under the Payments in Lieu of Taxes Act (Canada), and

4( 3) When the sum credited by the Minister to a rural district in respect of a grant under the Payments in Lieu of Taxes Act (Canada) for a fiscal year is less than the sum actually received by the Province, the Minister shall for the second next ensuing year cause the difference to be credited to the estimate prepared under paragraph 176.8(1)(a) of the Local Governance Act.

4( 4) When the sum credited by the Minister to a rural district in respect of a grant under the Payments in Lieu of Taxes Act (Canada) for a fiscal year exceeds the sum actually received by the Province, the Minister shall for the second next ensuing year cause the difference to be debited from the estimate prepared under paragraph 176.8(1)(a) of the Local Governance Act.

Computation of the assessed value of non-residential property

5 When computing the assessed value of non-residential property for the purposes of paragraph (e) of the definitions “municipal tax base” and “rural community tax base” and paragraph (d) of the definition “rural district tax base”, the assessed value shall be determined by the following formula:

(B – 1) × A

where

A means the assessed value of heavy industrial property or other non-residential property, as the case may be;

B means the average of the factors from 1.4 to 1.7 fixed in the previous year for properties throughout the province under clause 5(2)(a)(ii)(A) or (B), (a.1)(ii)(A) or (B), (c)(ii)(A) or (B) or (d)(ii)(A) or (B), as the case may be, of the Real Property Tax Act.

COMMUNITY FUNDING

Total amount of community grant to be fixed

6( 1) The Lieutenant-Governor in Council shall fix by order the total amount of the community grant, which represents the sum of the following amounts:

(a) the total amount of the equalization grant provided to communities each year,

(b) the total amount of the transitional grant provided to communities each year, and

6( 2) The Lieutenant-Governor in Council shall not be required to fix a new amount under subsection (1) each year, and the amount so fixed remains in effect until it is amended.

Municipal estimate

7( 1) Subject to subsections (2) to (4), the Minister shall approve the proposed municipal estimate that a municipality submits to the Minister in accordance with subsection 99(2) of the Local Governance Act.

7( 2) If the Minister requires, a municipality shall participate in partnership budgeting in which the municipality shall provide the Minister with an explanation and justification of its projected revenues and proposed expenditures.

7( 3) If the Minister requires partnership budgeting, the Minister may refuse to approve any part of the proposed municipal estimate that the Minister considers excessive, having regard to the standard of services provided by the municipality in preceding years and the proposed development and improvement of services in the municipality.

7( 4) The decision of the Minister not to approve a part of the proposed municipal estimate for a municipality under subsection (3) is final and not subject to review.

Rural community estimate

8( 1) Subject to subsections (2) to (4), the Minister shall approve the proposed rural community estimate that a rural community submits to the Minister in accordance with subsection 99(2) of the Local Governance Act.

8( 2) If the Minister requires, a rural community shall participate in partnership budgeting in which the rural community shall provide the Minister with an explanation and justification of its projected revenues and proposed expenditures.

8( 3) If the Minister requires partnership budgeting, the Minister may refuse to approve any part of the proposed rural community estimate that the Minister considers excessive, having regard to the standard of services provided by the rural community in preceding years and the proposed development and improvement of services in the rural community.

8( 4) The decision of the Minister not to approve a part of the proposed rural community estimate for a rural community under subsection (3) is final and not subject to review.

Payments to municipalities

9 On or before the first business day of each month in each year, the Minister shall pay to each municipality

(a) a portion of the equalization grant referred to in section 12,

(b) a portion of the transitional grant referred to in section 13, if any, and

Payments to rural communities

10( 1) On or before the first business day of each month in each year, the Minister shall pay to each rural community

(a) a portion of the equalization grant referred to in section 12 that remains after the rural community was credited the portion of the grant for the services provided to the rural community by the Minister,

(b) a portion of the transitional grant referred to in section 13, if any, and

10( 2) Each year, the Minister shall credit to each rural community the portion of the equalization grant that relates to the provision of services to the rural community by the Minister.

10( 3) Each year, the Minister shall compute and credit to each rural community the amount to be raised on the rural community tax base for the services provided to the rural community by the Minister.

Amounts credited to rural districts

11 Each year, the Minister shall

(a) credit to each rural district

( i) the equalization grant referred to in section 12, and

( ii) the transitional grant referred to in section 13, if any, and

(b) compute and credit to each rural district the amount to be raised on the rural district tax base.

Equalization grant

12( 1) The equalization grant provided to a community shall be determined by the following formula:

[1 + (E – D)] × C

where

C means the equalization grant provided to the community for the previous year;

D means the growth of the municipal tax base, the rural community tax base or the rural district tax base, as the case may be;

E means the growth of the provincial tax base.

12( 2) For the purposes of subsection (1), for the year 2023, the variable “C” shall be deemed to mean the equalization provided in the year 2022 under paragraph 11(b) or 14(b) or section 21, as the case may be, of the Community Funding Act, chapter 56 of the Acts of New Brunswick, 2012.

12( 3) For the purposes of subsection (1), the variable “D” shall be determined by the following formula:

(F – G) / G

where

F means the municipal tax base, the rural community tax base or the rural district tax base, as the case may be, for the current year;

G means the municipal tax base, the rural community tax base or the rural district tax base, as the case may be, for the previous year.

12( 4) For the purposes of subsection (1), the variable “E” shall be determined by the following formula:

(H – I) / I

where

H means the provincial tax base for the current year;

I means the provincial tax base for the previous year.

12( 5) For the purposes of the variable “G” in subsection (3) and the variable “I” in subsection (4), despite An Act to Repeal An Act to Comply with the Request of The City of Saint John on Taxation of the LNG Terminal, chapter 38 of the Acts of New Brunswick, 2016, the assessment of the LNG terminal to be used for the year 2022 is the assessment made after a review or appeal referred to in that Act arising from its assessment has been finally determined or the time for review or appeal of the assessment has expired.

12( 6) For the purposes of the formula referred to in subsection (4), if the variable “E” is a number greater than 0.03, it shall be deemed to be 0.03.

12( 7) With respect to a community or a portion of a community that is incorporated or restructured following an amalgamation, an annexation or a decrease in its territorial limits, as the case may be, its equalization grant shall consist of the equalization grants that the affected municipalities, rural communities, rural districts or local service districts, or any portion of them, had received in their previous forms in the previous year.

Transitional grant

13( 1) In this section, “core funding” means the core funding component provided in 2022 of the community funding and equalization grant established under the Community Funding Act, chapter 56 of the Acts of New Brunswick, 2012.

13( 2) Despite any other provision of this Act and subject to subsection (3), in addition to the equalization grant, a transitional grant shall be provided to communities, which shall be fixed as follows:

(a) for the year 2023, 80% of core funding;

(b) for the year 2024, 60% of core funding;

(d) for the year 2026, 20% of core funding; and

(e) for the year 2027 and for every subsequent year, nil.

13( 3) With respect to a community or a portion of a community that is incorporated or restructured following an amalgamation, an annexation or a decrease in its territorial limits, as the case may be, its core funding shall consist of the core funding that the affected municipalities, rural communities, rural districts or local service districts, or any portion of them, had received in their previous forms in the previous year.

Regional Services Support Fund

14( 1) There is established a fund named the Regional Services Support Fund.

14( 2) The Minister of Finance and Treasury Board shall be the custodian of the Fund.

14( 3) Payments into the Fund shall be made in accordance with section 15.

14( 4) Any payments out of the Fund made for the purposes of section 16 shall be a charge on and payable out of the Fund.

14( 5) Payments out of the Fund shall not exceed an amount that represents the contributions made to the Fund and accumulated interest.

14( 6) The Fund shall be held, for the purposes of this Act, in a separate account in the Consolidated Fund.

14( 7) Any interest arising from the Fund shall be paid into and form part of the Fund.

14( 8) Any amounts remaining in the Fund at the end of a fiscal year shall be carried forward to the next fiscal year.

14( 9) The Minister of Finance and Treasury Board may invest the money in the Fund in the manner authorized by the Trustees Act, including investments in securities issued under the Provincial Loans Act.

Payments to the Fund

15 The amount determined by the following formula shall be paid to the Fund each year:

J – (K + L)

where

J means the total amount of the community grant fixed under section 6;

K means the total amount of the equalization grant provided under section 12;

L means the total amount of the transitional grant provided under section 13, if applicable.

Use of assets of Fund and grant applications

16( 1) The assets of the Fund shall be used to support the regional service commissions in implementing the activities identified in their regional strategy developed in accordance with section 3.2 of the Regional Service Delivery Act.

16( 2) On application for a grant by a regional service commission, the Minister may make payments out of the Fund for the purposes of subsection (1) and pay sums to a regional service commission, subject to any parameters, terms, conditions or restrictions prescribed by regulation.

16( 3) Subject to subsection (4), the Minister shall not award a grant in an amount greater than 50% of the cost of the activity proposed in the application.

16( 4) An application for a grant may propose a multi-year activity, but the Minister shall not pay to a regional service commission in any one year an amount greater than 50% of the portion of the annual budget allocated by the regional service commission to the activity in that year.

16( 5) An application for a grant shall be made in a form and in the manner determined by the Minister.

SPECIAL CIRCUMSTANCES

Conditions on monthly payments to municipalities

17( 1) Despite any provision of this Act, other than this section, or of any other Act or any regulation under this Act or any other Act, a municipality that collects tax and penalties under subsection 6(2) of the Real Property Tax Act is not entitled to the payment under paragraph 9(c) for the period of time of the collection.

17( 2) Despite any provision of this Act, other than this section, or of any other Act or any regulation under this Act or any other Act, when the Minister of Finance and Treasury Board collects under the Real Property Tax Act the tax imposed by a municipality under paragraph 5(2)(a) of that Act and the penalties on the tax for and on behalf of the municipality and the municipality claims the tax and penalties from the Minister of Finance and Treasury Board, the municipality is not entitled to the payment under paragraph 9(c).

17( 3) Despite any provision of this Act, other than this section, or of any other Act or any regulation under this Act or any other Act, when a municipality has been paid the sums under paragraph 9(c) for a year, whether before or after the commencement of this subsection, the payment shall be deemed to be in full satisfaction of the payment over to the municipality of the tax imposed under paragraph 5(2)(a) of the Real Property Tax Act and the penalties on the tax for that year.

Conditions on monthly payments to rural communities

18( 1) Despite any provision of this Act, other than this section, or of any other Act or any regulation under this Act or any other Act, a rural community that collects tax and penalties under subsection 6(4) of the Real Property Tax Act is not entitled to the payment under paragraph 10(1)(c) for the period of time of the collection.

18( 2) Despite any provision of this Act, other than this section, or of any other Act or any regulation under this Act or any other Act, when the Minister of Finance and Treasury Board collects under the Real Property Tax Act the tax imposed by a rural community under paragraph 5(2)(a.1) of that Act and the penalties on the tax for and on behalf of the rural community and the rural community claims the tax and penalties from the Minister of Finance and Treasury Board, the rural community is not entitled to the payment under paragraph 10(1)(c).

18( 3) Despite any provision of this Act, other than this section, or of any other Act or any regulation under this Act or any other Act, when a rural community has been paid the sums under paragraph 10(1)(c) for a year, whether before or after the commencement of this subsection, the payment shall be deemed to be in full satisfaction of the payment over to the rural community of the tax imposed under paragraph 5(2)(a.1) of the Real Property Tax Act and the penalties on the tax for that year.

Grants to municipalities where universities are located

19 If the municipal tax base includes the assessed value of real property in the municipality that is exempt from taxation under paragraph 4(1)(l) of the Assessment Act, the portion of the amount referred to in paragraph 9(c) that is equal to the tax on the real property that would be due and owing to the municipality under subsection 5(2.001) of the Real Property Tax Act if the real property were not exempt from taxation shall be deemed to be a grant paid by the Minister to the municipality.

Grants to rural communities where universities are located

20 If the rural community tax base includes the assessed value of real property in the rural community that is exempt from taxation under paragraph 4(1)(l) of the Assessment Act, the portion of the amount referred to in paragraph 10(1)(c) that is equal to the tax on the real property that would be due and owing to the rural community under subsection 5(2.003) of the Real Property Tax Act if the real property were not exempt from taxation shall be deemed to be a grant paid by the Minister to the rural community.

Stimulation grants

21( 1) The Lieutenant-Governor in Council may pay to a municipality or rural community or credit to a rural district a stimulation grant to assist the municipality, rural community or rural district in developing or improving the standard of a service or facility.

21( 2) A grant paid or credited under subsection (1) may be either current or capital in nature, but if the grant is capital in nature, it shall be used by the municipality, the rural community or the Minister to reduce any capital borrowing related to the service or facility for which the grant is made unless the Lieutenant-Governor in Council agrees to pay to a municipality or a rural community or credit to a rural district an annual grant related to the amortization and maintenance costs of a project in lieu of a grant to be used to reduce the capital borrowing.

21( 3) The Lieutenant-Governor in Council may attach terms and conditions to a stimulation grant.

21( 4) The total amount of stimulation grants to be paid or credited in any year may be fixed by order of the Lieutenant-Governor in Council and shall not exceed 15% of the total amount of the community grant fixed in accordance with section 6.

21( 5) Stimulation grants paid to municipalities or rural communities on an amalgamation or annexation are not subject to the limitation provided in subsection (4).

21( 6) A stimulation grant may be paid or credited in one or more annual instalments not exceeding 10, but when a stimulation grant is being paid or credited in respect of a service or facility the costs of which are to be met on an amortized basis in relation to principal and interest, the stimulation grant may be paid or credited in whole or in part in conjunction with the schedule of amortization.

21( 7) For the purposes of this section, a water or wastewater commission established or continued under section 15.2 of the Clean Environment Act and a regional service commission shall be deemed to be a municipality.

Power to assist a municipality or rural community

22 The Lieutenant-Governor in Council may, on the terms and conditions agreed to by the parties, grant to a municipality or rural community that is in financial difficulty the assistance by way of loan, guarantee, grant or otherwise as the Lieutenant-Governor in Council considers necessary.

GENERAL

Application of Regulations Act

23 The Regulations Act does not apply to an order made under this Act, other than a regulation made under section 25.

Administration

24 The Minister shall administer this Act and may designate persons to act on the Minister’s behalf.

Regulations

25 The Lieutenant-Governor in Council may make regulations

(a) for the purposes of section 16,

( i) establishing the parameters to be followed by the Minister in selecting activities for funding, including designating

( A) activities that are eligible or ineligible for a grant, and

( B) activities to be prioritized,

( ii) prescribing any restrictions and conditions to be met by the Minister in withdrawing money from the Fund and paying it to a regional service commission,

( iii) prescribing terms and conditions to be met by a regional service commission to maintain eligibility for payments,

( iv) respecting any other matter that may be necessary for the proper administration of the Fund;

(b) defining any word or expression used in but not defined in this Act for the purposes of this Act, the regulations or both;

TRANSITIONAL PROVISIONS
AND CONSEQUENTIAL AMENDMENTS

26( 1) In the year 2023, regional service commissions shall not be entitled to a regional services support grant under section 16, but the Minister shall pay in lieu of the grant an amount fixed by order of the Lieutenant-Governor in Council, which amounts may vary for different commissions.

26( 2) The Regulations Act does not apply to an order made under subsection (1).

26( 3) The Minister may attach terms and conditions to a grant.

An Act Respecting Local Governance Reform

27( 1) Subsection 4(1) of An Act Respecting Local Governance Reform, chapter 44 of the Acts of New Brunswick, 2021, is amended

(a) in paragraph (b), by repealing the portion preceding paragraph (a) of the definition “municipal tax base”, as enacted by paragraph (b), and substituting the following:

“municipal tax base” means the amount computed on or before October 15 or as soon afterwards as the circumstances permit in the year previous to the year in respect of which the equalization grant under the Community Funding Act is determined as

(b) in paragraph (c), by repealing the portion preceding paragraph (a) of the definition “regional municipality tax base”, as enacted by paragraph (c), and substituting the following:

“regional municipality tax base” means the amount computed on or before October 15 or as soon afterwards as the circumstances permit in the year previous to the year in respect of which the equalization grant under the Community Funding Act is determined as

(c) in paragraph (d), by repealing the portion preceding paragraph (a) of the definition “rural community tax base”, as enacted by paragraph (d), and substituting the following:

“rural community tax base” means the amount computed on or before October 15 or as soon afterwards as the circumstances permit in the year previous to the year in respect of which the equalization grant under the Community Funding Act is determined as

(d) in paragraph (e), by repealing the portion preceding paragraph (a) of the definition “rural district tax base”, as enacted by paragraph (d), and substituting the following:

“rural district tax base” means the amount computed on or before October 15 or as soon afterwards as the circumstances permit in the year previous to the year in respect of which the equalization grant under the Community Funding Act is determined as

27( 2) Subparagraph 5(4)(a)(i) of the Act is repealed and the following is substituted:

(i) by repealing the definition “local service district tax base” and substituting the following:

“local service district tax base” means local service district tax base as defined in the Local Governance Act, adjusted in accordance with subsection 4(2) of the Community Funding Act, chapter 56 of the Acts of New Brunswick, 2012, as those Acts existed immediately before January 1, 2023. (assiette fiscale de district de services locaux)

Regulation under the Local Governance Act

28 Paragraph 3(1)(b) of New Brunswick Regulation 2018-71 under the Local Governance Act is repealed and the following is substituted:

(b) the expiry of 30 days from the date in each year the local government receives the tax base and equalization grant information under the Community Funding Act.

REPEALS AND COMMENCEMENT

Repeal of the Community Funding Act

29 The Community Funding Act, chapter 56 of the Acts of New Brunswick, 2012, is repealed.

Repeal of Groups of Municipalities and Rural Communities Regulation – Community Funding Act

30 New Brunswick Regulation 86-143 under the Community Funding Act is repealed.

Commencement

31 Sections 1 to 26 and sections 28 to 30 of this Act come into force on January 1, 2023.

An Act Respecting Local Governance Reform

2( 1) Section 9 of an Act Respecting Local Governance Reform, chapter 44 of the Acts of New Brunswick, 2021, is amended

(a) in subsection (1), by striking out “From the commencement of this section until August 31, 2022” and substituting “From the commencement of this section until December 31, 2022”;

(b) by repealing subsection (2).

2( 2) The Act is amended by adding after section 11 the following:

11.1( 1) From the commencement of this section until June 30, 2023, inclusive, despite any inconsistency with the provisions of the Local Governance Act, in the case of a rate adjusted by the Minister under paragraph 11(2)(f), the Lieutenant-Governor in Council may, by regulation,

(a) fix, for a period of not more than 10 years, the parameters within which a restructured local government may increase or decrease the rate each year, which parameters may vary for different restructured local governments, and

(b) prescribe the costs, services, liabilities or any other matter to which paragraph (a) does not apply.

11.1( 2) From the commencement of a regulation made under subsection (1) until the expiry of the period provided for in that regulation, on application of a restructured local government, the Minister may by order, on any grounds the Minister considers appropriate, amend solely for that restructured local government

(a) the parameters fixed under paragraph (1)(a), or

(b) the list of costs, services, liabilities or other matters prescribed under paragraph (1)(b).

11.1( 3) The Regulations Act does not apply to an order made under subsection (2).

2( 3) Subsection 15(1) of the Act is amended by striking out “From the commencement of this section until August 31, 2022” and substituting “From the commencement of this section until December 31, 2022”.