The Union of Municipalities in New Brunswick (UMNB) says that while it is encouraging to see the Liberal government commit to bringing a bill to the legislature on fiscal reform, municipalities will not receive much relief in the next year.
Dan Murphy, UMNB’s executive director, said while money has been allocated for the first quarter of 2026, there remain a lot of questions.
“How municipalities are going to be engaged, as well as, how that money is going to be distributed and what the total funds are,” he said in an interview with The Courier.
The organization said a report showed there is a nearly $200 million shortfall in funding to municipalities, who now face providing money for things it has not in the past and taking on additional residents and geography through amalgamation.
According to UMNB, the 2022 municipal reform, undertaken by the previous Progressive Conservative governments, increased the number of people living in a local government by 38 per cent, but without any funding mechanism added to help.
It is particularly concerned about the infrastructure gap, measured at $2.5 billion.
Murphy said he understands the goal remains to have fiscal reform completed by Jan. 1, 2026, but in the meantime, municipalities are struggling.
“We had also asked for a temporary funding measure for 2025 to offset that need, which so far we haven’t seen any indications of in the budget,” he said. “Once the department comes in to do main estimates, we may have a better idea if there’s any money in there, but it’s certain that councils need money now.”
Murphy said the councils are being responsive to what their communities are asking of them and it means, now, bleeding into things like provincial responsibilities, like healthcare and housing.
“Obviously, whether we’re talking about health care or social services or economic development, things that 10 years ago municipalities weren’t talking about,” he said. “We’re doing it without any extra resourcing, and that’s something that we hope the fiscal reform process will address, whether that means through funding municipalities to do some of that work or the provincial government stepping back into those spaces and funding those services adequately.”
It remains unclear what the fiscal reform framework could look like, but local municipalities are feeling the pinch.
Grand Manan Mayor Bonnie Morse said municipalities are making choices about prioritizing.
Grand Manan Mayor Bonnie Morse attending the meeting between local governments and the province hosted by the Union of Municipalities of New Brunswick (UMNB/Submitted)
“Municipalities are limited in the amount of debt we can take on and those choices come down to doing a project and the impact on the property tax rate,” she said in a statement.
In Eastern Charlotte, the municipality has seen about a 40 per cent reduction in the equalization grants it receives from the provincial government.
“However, there are new calls for municipalities to contribute to local provincial road work, social programming and childcare, and funds to attract new doctors, all of which are mandates of the Province and all of which New Brunswickers pay for through other taxation,” said Chief Administrative Officer Jason Gaudet.
In essence, Gaudet said, being asked to do more with less means it must change the only method of revenue it has – property tax – leaving the burden on residential ratepayers.
He also said the town for the first time in decades will receive zero summer student reimbursements.
“Yet another program, (in) which municipalities are being reduced or cut out,” he said.
Saint Andrews Mayor Brad Henderson said fiscal reform continues to linger without details for future financial planning.
“Communities are expected to operate with more provincially mandated services and rising costs with no additional revenue solutions outside of property tax,” he said.
Property tax is considered a double-edged sword to most municipalities, given raising property tax burdens the residential ratepayer, and lowering it burdens the governments who rely on it.
“For Saint Andrews, we have been fortunate to have tax growth through new construction, but we continue like all municipalities across the province, to struggle with replacing aging infrastructure,” Henderson explained.
The council is scheduled to begin repairs to the iconic Saint Andrews wharf, which is expected to cost the municipality more than $2 million.
New Brunswick Premier Susan Holt sitting beside UMNB President Brittany Merrifield, the mayor of Grand Bay-Westfield. (UMNB/Submitted)
“I think it’s important for communities across the province to push back on their municipal contributions to Regional Service Commissions until they receive revenue sources for these new expected services which were downloaded from the provincial government,” he said in a statement.
During meetings of the membership of UMNB, Henderson and Morse both said they’ve been told municipalities will see “visibility into” fiscal reform.
“Despite how the previous government did not live up to their promised dates, we should give our new government the same courtesy,” Henderson said.
The Department of Environment and Local Government said in an email statement it is collaborating with local, rural and regional partners to look at ways of financing the new local governance structure.
“The department understands that local governments face different financial challenges and wants to ensure a fair funding model is developed to enable local governments to deliver services to the people of New Brunswick,” said Jennifer MacNeil, a spokesperson for the department.
“More details will be shared during the main estimates process in April,” she said in the statement. “The department is also planning to introduce a bill in the legislature this spring which will outline a plan to provide the needed financial support to local governments and regional service commissions.”
MacNeil didn’t provide specifically what might be included as the other funding streams, but added “more details will be made available at that time.”
She said it is important to note that fiscal reform is on schedule. Municipalities did meet with Minister Aaron Kennedy at a meeting last week hosted by UMNB, known as Advocacy Days.
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