Municipalities will see an additional $138 million in funding for 2026 as part of a new and long-awaited fiscal reform framework.
While the legislation will be tabled in the spring, and no details were provided on where this money will come from, but it is expected the funding will grow to more than $188 million by 2030.
“We have been collaborating with local, rural, and regional partners, looking at ways of financing the new local governance structure,” said Local Government Minister Aaron Kennedy. “We are committed to working with local governments to implement comprehensive and fair fiscal reform.”
The previous Progressive Conservative government introduced municipal reform but did not complete the fiscal element during its term, which many councils said was putting pressure on them as they took on more services and responsibilities.
Municipalities are only funded through property tax and the amount changes based on whether the local government increases or decreases the rate. If it increases the rate, municipalities get more, if they lower it, it gets less.
The Union of Municipalities of New Brunswick (UMNB) and the Association Francophone des municipalités du Nouveau-Brunswick said in a release it welcomed the announcement, but did criticize the lack of details about where the funding would come from.
“This represents important progress,” the organization said. “Both associations acknowledge the minister’s recognition of the challenges municipalities face, as well as the work carried out within the provincial reform working group.
“However, today’s press release does not provide details on how funds will be allocated or the full implementation timeline – crucial elements for municipalities, which are still waiting for more information in order to plan effectively.”
The two associations say the announcement falls short of the actual needs facing municipalities.
“A five-year rollout would further delay full support until 2030 – seven years after municipal reform was implemented,” the release said.
It said the timeline to progressively increasing funding over five years concerns them, given the nearly $2.5 billion deficit in infrastructure facing municipalities.
“Delaying essential infrastructure investments only increases future costs and undermines the quality of services provided to citizens,” said UMNB president Brittany Merrifield. “We need to act quickly to prevent further deterioration. “Delays will impact the bottom line of municipalities, as the shifting financial realities put more pressure on municipalities to do more with less – which isn’t feasible. A five-year phase-in only prolongs that pressure and pushes critical investments further out of reach.”
Municipalities are also increasingly directing funding toward childcare, housing, and healthcare in their communities, with 85 per cent of the revenue coming from property tax.
In Charlotte County, the local governments are welcoming the news, but are awaiting the details.
Jason Gaudet, the chief administrative officer (CAO) for Eastern Charlotte, said it is anxious to hear the details.
“We are anxious to understand the ‘details of the funding model,’ ” he said in a statement. “We have questions on where the new funding will come from, whether it means new impacts to our property taxpayers or is new money coming via an increase/restoration in the Community Funding and Equalization Grant which Eastern Charlotte has seen a 38 per cent decline since pre-municipal reform in 2022.”
A similar sentiment was shared by Municipal District of St. Stephen (MDSS) CAO Jeff Renaud, saying the funding is welcome news.
“It is certainly encouraging that the Government of New Brunswick recognizes the fiscal challenges being faced by municipalities of all sizes across our province,” he said. “The details on how this additional funding will be provided to municipalities, and any restrictions that may be applied to the use of such funds, will ultimately determine how much municipalities will benefit from this announcement.”
Saint Andrews Mayor Brad Henderson also said the details will be important.
“However, the distribution of these funds between the municipalities will be another key determinant on the impact it can make locally,” he said. “We are appreciative that our provincial government is living up to the promise of assisting municipalities with our aging infrastructure.”
During a recent UMNB meeting called Advocacy Days, the province told the councils that legislation is expected to be introduced in May.
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