Bill 33 - An Act to Amend the Community Funding Act

BILL 33

An Act to Amend the Community Funding Act

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

1 Section 1 of the Community Funding Act, section 1 of chapter 40 of the Acts of New Brunswick, 2022, is amended

(a) by repealing the definition “provincial tax base”;

(b) in the definition “municipal tax base” in the portion preceding subparagraph (e)(i) by striking out “section 5” and substituting “the regulations”;

(c) in the definition “rural community tax base” in the portion preceding subparagraph (e)(i) by striking out “section 5” and substituting “the regulations”;

(d) in the definition “rural district tax base” in the portion preceding subparagraph (d)(i) by striking out “section 5” and substituting “the regulations”;

(e) by adding the following definitions in alphabetical order:

“capital project” means a project of a type, category or size prescribed by regulation for the purposes of subsection 16.1(2). (projet d’immobilisation)

“capital renewal funding” means the funding referred to in subsection 16.1(2). (fonds affectés au renouvellement des immobilisations)

“capital renewal grant” means the funding provided to a community under section 16.2. (subvention de renouvellement des immobilisations)

“Consumer Price Index” means the Consumer Price Index for New Brunswick (All-items) published by Statistics Canada under the Statistics Act (Canada). (indice des prix à la consommation)

“eligible community” means a community that, following a determination made under section 12 or 16.2, as the case may be, is entitled to receive an equalization grant or a capital renewal grant. (communauté admissible)

“equalization grant” means the funding provided to a community under section 12. (subvention de péréquation)

“fiscal capacity funding” means the funding referred to in subsection 11.1(2). (fonds destinés à accroître la capacité fiscale)

“group” means a group of communities established by regulation. (groupe)

“local government cost index” means an estimate of the percentage change in the operational costs of communities computed under section 4.2. (indice des coûts des gouvernements locaux)

“year” means, unless the context requires otherwise, a calendar year. (année)

2 The Act is amended by adding after section 4 the following:

Minister may determine tax base

4.1 Despite sections 2, 3 and 4, the Minister may, in the Minister’s discretion, determine a municipal tax base, a rural community tax base or a rural district tax base when a community or a portion of a community has been incorporated or is restructured or dissolved following an amalgamation, an annexation or a decrease in its territorial limits, as the case may be.

Computation of the local government cost index

4.2( 1) Subject to subsection (2), the local government cost index is determined by the following formula:

A × 0.25 + B × 0.25 + C × 0.25 + D × 0.25

where

A means the percentage change in population in the Province in the previous year;

B means the percentage change in the Consumer Price Index in the previous year;

C means the percentage change in the non-residential building cost in the Province in the previous year;

D means the percentage change in salaries and wages in the Province in the previous year.

4.2( 2) If the result of the computation under subsection (1) is a number greater than five, the local government cost index is deemed to be five percent.

4.2( 3) For the purposes of subsection (1), the following values shall be determined by the Minister based on the most recent data for New Brunswick published by Statistics Canada:

(a) population and change in population based on the official population estimate or, if an official population estimate has not been published, the latest official census;

(b) Consumer Price Index;

(d) non-residential building cost based on the Non-Residential Building Construction Price Index.

4.2( 4) The Minister may, in the Minister’s discretion, determine any value referred to in subsection (3)

(a) in the absence of a publication referred to in subsection (3), or

(b) when a community or a portion of a community has been incorporated or is restructured or dissolved following an amalgamation, an annexation or a decrease in its territorial limits, as the case may be.

3 The Act is amended by repealing the heading “Computation of the assessed value of non-residential property” preceding section 5.

4 Section 5 of the Act is repealed.

5 The Act is amended by repealing the heading “Total amount of community grant to be fixed” preceding section 6.

6 Section 6 of the Act is repealed.

7 The Act is amended by adding before section 7 the following:

Funding

6.1 In each year, the Minister may provide funding to eligible communities for the purposes of this Act out of the money appropriated by the Legislature for those purposes.

8 Section 9 of the Act is amended

(a) in paragraph (a) of the English version by adding “and” at the end of the paragraph;

(b) by repealing paragraph (b).

9 Subsection 10(1) of the Act is amended

(a) in paragraph (a) of the English version by adding “and” at the end of the paragraph;

(b) by repealing paragraph (b).

10 Subparagraph 11(a)(ii) of the Act is repealed.

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

Fiscal capacity funding

11.1( 1) For the purposes of this section, “total amount of funding” means the total amount of fiscal capacity funding for all eligible communities.

11.1( 2) The Minister may use fiscal capacity funding to provide equalization grants to eligible communities in order to ensure that they achieve the purposes set out in section 5 of the Local Governance Act.

11.1( 3) On or before July 31 of the previous year, or as soon afterwards as the circumstances permit, the Lieutenant-Governor in Council shall fix by order the total amount of funding for the current year on the basis of the estimated total amount of equalization grants to be provided to all eligible communities in the current year.

11.1( 4) For the purposes of subsection (3), the estimated total amount of funding for the year 2026 shall be fixed by the Minister, in the Minister’s discretion.

11.1( 5) For the purposes of subsection (3), for the year 2027 and each subsequent year, the estimated total amount of funding is determined by the following formula:

E × (1 + F)

where

E means the total amount of funding that was available for the previous year;

F means the local government cost index.

11.1( 6) If the estimated total amount of funding under subsection (4) or (5) exceeds the available total amount of funding for the current year, equalization grants shall be provided to eligible communities from the available funding on a pro rata basis.

12 Section 12 of the Act is repealed and the following is substituted:

12( 1) The amount of the equalization grant to be provided to a community in the current year is determined by the following formula:

G × 0.25 + H × 0.25 + I × 0.25 + J × 0.25

where

G means the equalization amount determined for the current year;

H means the equalization amount determined for the previous year;

I means the equalization amount determined for the year two years before the current year;

J means the equalization amount determined for the year three years before the current year.

12( 2) For the purposes of this section, an equalization amount shall be determined or adjusted, based on the group to which the community belongs, in accordance with the regulations.

12( 3) Despite subsection (1), an equalization amount represented by the following variables is determined in accordance with subsection (4) in the following circumstances:

(a) when variable “H” applies to the year 2025;

(b) when variable “I” applies to the year 2024 or 2025; or

12( 4) For the purposes of subsection (3), variable “H”, variable “I” or variable “J”, as the case may be, is determined by the following formula:

K × (L ÷ M)

where

K means the sum of the equalization grant and the transitional grant received by the community in the year 2025;

L means the total amount of fiscal capacity funding fixed by the Lieutenant-Governor in Council for the year 2026;

M means the total amount of equalization grants and transitional grants received by all communities in the year 2025.

13 The Act is amended by adding after section 12 the following:

Interpretation of “equalization grant” and “transitional grant”

12.1 For the purposes of subsection 12(4), the terms “equalization grant” and “transitional grant” have the same meaning as they did under sections 12 and 13, respectively, of this Act as it read on May 1, 2025.

14 The heading “Transitional grant” preceding section 13 of the Act is repealed.

15 Section 13 of the Act is repealed.

16 The heading “Payments to the Fund” preceding section 15 of the Act is repealed and the following is substituted:

Total amount paid into the Fund

17 Section 15 of the Act is repealed and the following is substituted:

15( 1) The Lieutenant-Governor in Council shall fix by order the total amount to be paid into the Fund for the allocation of grants to regional service commissions during the current year.

15( 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.

15( 3) The amount fixed under subsection (1) shall be paid into the Fund each year.

18 Section 16 of the Act is amended

(a) in subsection (3) by striking out “cost of the activity” and substituting “total cost of the activities”;

(b) by repealing subsection (4) and substituting the following:

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 total cost of all the activities proposed by the regional service commission for that year.

19 The Act is amended by adding after section 16 the following:

Capital renewal funding

16.1( 1) For the purposes of this section, “total amount of funding” means the total amount of capital renewal funding for all eligible communities.

16.1( 2) The Minister may provide capital renewal funding to support eligible communities in implementing capital projects relating to the renewal and replacement of community infrastructure, subject to the parameters, terms, conditions or restrictions, if any, prescribed by regulation.

16.1( 3) On or before July 31 of the previous year, or as soon afterwards as the circumstances permit, the Lieutenant-Governor in Council shall fix by order the total amount of funding for the current year.

16.1( 4) For the years 2026 to 2030, the total amount of funding shall be fixed by the Minister, in the Minister’s discretion.

16.1( 5) For the year 2031 and for each subsequent year, the total amount of funding is determined by the following formula:

N × (1 + O)

where

N means the total amount of funding that was available for the previous year;

O means the local government cost index.

Capital renewal grants

16.2( 1) The amount of a capital renewal grant to be provided to a community shall be determined in accordance with the regulations.

16.2( 2) The Minister shall pay to each eligible community a portion of the capital renewal grant referred to in subsection (1)

(a) on or before January 31 in each year, and

(b) on or before July 31 in each year.

20 Section 21 of the Act is amended

(a) in subsection (4) by striking out “and shall not exceed 15% of the total amount of the community grant fixed in accordance with section 6”;

(b) by repealing subsection (5).

21 Section 22.1 of the Act is amended by striking out “the commencement of this Act” and substituting “September 1, 2025”.

22 Section 25 of the Act is repealed and the following is substituted:

Regulations

25( 1) The Lieutenant-Governor in Council may make regulations

(a) prescribing the type, category or size of projects for the purposes of the definition “capital project”;

(b) establishing groups of communities for the purposes of the definition “group”;

(c) determining the assessed value of non-residential property, including heavy industrial property, for the purposes of the definitions “municipal tax base”, “rural community tax base” and “rural district tax base”;

(d) governing fiscal capacity funding for the purposes of section 11.1;

(e) governing equalization grants for the purposes of section 12, including regulations

( i) respecting the determination or adjustment of equalization amounts for the purposes of subsection 12(2),

( ii) prescribing one or more formulas for the purposes of determining or adjusting an equalization amount under subsection 12(2) and the manner in which a formula is to be applied,

( iii) prescribing any restrictions or conditions to be met by the Minister in providing an equalization grant to a community, and

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

(f) governing the Fund for the purposes of section 16, including regulations

( 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 or 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 reporting by a regional service commission concerning the administration and use of money it has received from the Fund, and

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

(g) governing capital renewal funding for the purposes of section 16.1, including regulations

( i) prescribing parameters, terms, conditions or restrictions for the purposes of subsection 16.1(2), including

( A) any restrictions or conditions to be met by the Minister in providing a capital renewal grant to a community, and

( B) parameters to be followed by the Minister in approving capital projects for funding,

( ii) respecting capital projects for the purposes of subsection 16.1(2), including

( A) eligible expenditures, contributions that may be required and the financing that may be provided in connection with capital projects,

( B) capital projects that are eligible or ineligible for a capital renewal grant, and

( C) capital projects to be prioritized, and

( iii) respecting any other matter that may be necessary for the proper administration of capital renewal funding;

(h) governing capital renewal grants for the purposes of section 16.2, including regulations

( i) prescribing the manner in which the Minister may determine the amount of a capital renewal grant for the purposes of subsection 16.2(1),

( ii) prescribing one or more formulas for the purposes of determining the amount of a capital renewal grant under subsection 16.2(1) and the manner in which a formula is to be applied,

( iii) prescribing terms and conditions to be met by a community to maintain eligibility for a capital renewal grant,

( iv) prescribing the circumstances in which and the time within which a capital renewal grant shall be deferred, reallocated or repaid, and

( v) respecting reporting by a community concerning the administration and use of capital renewal funding;

(i) governing the effect of any calculation under this Act or the regulations that produces a result equal to or less than zero;

(j) prescribing information or documentation to be provided to the Minister in relation to funding under this Act;

(k) respecting funding to be provided to a community when that community or a portion of that community is incorporated or is restructured or dissolved following an amalgamation, an annexation or a decrease in its territorial limits, as the case may be;

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

(m) respecting any other matter or thing necessary or advisable to carry out the intent of this Act.

25( 2) Regulations may vary for or be made in respect of different communities, groups, capital projects, matters or activities or different classes or categories of communities, groups, capital projects, matters or activities.

25( 3) A regulation may be general or particular in its application, may be limited as to time or place or both and may exclude any community, group, capital project, matter or activity from the application of the regulation.

TRANSITIONAL PROVISIONS,
CONSEQUENTIAL AMENDMENTS AND
COMMENCEMENT

Transitional provisions

23( 1) In the year 2025, a community shall be entitled to the equalization grant to which the community was entitled under section 12 of the Act as it read immediately before the commencement of this section.

23( 2) In the year 2025, a community shall be entitled to the transitional grant to which the community was entitled under section 13 of the Act as it read immediately before the commencement of this section.

23( 3) In the year 2025, a regional service commission shall be paid any grant from the Regional Services Support Fund which the regional service commission was awarded under section 16 of the Act as it read immediately before the commencement of this section.

Consequential amendment – Regulation under the Community Funding Act and the Regional Service Delivery Act

24 Section 2 of New Brunswick Regulation 2023-35 under the Community Funding Act and the Regional Service Delivery Act is amended by adding the following definition in alphabetical order:

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

Commencement

25( 1) Subject to subsection (2), this Act or any provision of it comes into force on a day or days to be fixed by proclamation.

25( 2) The following provisions of this Act come into force on Royal Assent:

(a) sections 5 and 6;

(b) subsections 11.1(1) to 11.1(4) as enacted by section 11;

(d) subsections 16.1(1) to 16.1(4) as enacted by section 19; and

(e) section 23.