About 6 years ago i wrote an article entitled “Not All tax Dollars are Created Equal” and after reading a letter to the editor this morning by a Saint John lady pensioner who was concerned about the sum total of her water, sewage and property taxes I thought it was time to re-address the subject. Property taxes as well as water and sewage charges are “eating” into funds that would normally pay for food.
A few years ago David Dodge, former governor of the Bank of Canada, said Canadians need to tuck away between 10 and 20 per cent of their per-tax earnings for the next 30 years to supplement company pensions if they expect to retire comfortably.
Data suggests that only 25 per cent of Canadians working in the private sector have pension plans. Roughly 50 per cent of Canadians contribute to an RRSP (Registered Retirement Savings Plan) with a national average value of somewhere around $65,000.
Take heart if you’re not a City Employees with a protected pension plan, all is not lost for those of us who appear to be left out in the financial cold. There is another form of investment that may be converted into a “retirement income” at some time in the future. The largest single investment many folks in Saint John will make in their entire lives is buying a house. Too many folks in Saint John fall into this sizable and often-too silent category. Without a company pension and an RRSP, many people may eventually need to convert the equity in their home to a more liquid investment to supplement their Canada and Old Age pensions to hold body and soul together in their “Golden years”.
Let’s dig a little deeper into “Not All tax Dollars are Created Equal”and see if all property tax dollars are created equal. Councilor Merrithew believes us folks in Saint John are getting a better deal than our neigbours even with the higher tax rate of $1.785 per $100 of assessment. CBC Apr 2014 – “Merrithew argues owners of a similar home get a better deal in Saint John than in Fredericton and Moncton.”We are not taxed the highest in the province,” he said. “Even though we have a higher tax rate our taxes are lower here in the city of Saint John.”
As an investment advisor would Councilor Merrithew recommend to his clients that they buy shares in companies that “appreciate” or “depreciate”?
For the most part over the past 10 or more years houses in Moncton, Fredericton, Quiispamsis, Rothesay and other communities have been “appreciating” in value at the same time many residential properties in Saint John have been “depreciating” in market and assessed value thereby lowering Saint John property taxes on a home “comparable” to one in say Quispamsis or Rothesay. There is little consolation in having a lower property tax bill than someone in “the valley” as you watch your major investment and retirement fund go down is value. Would you agree?
What do you suppose the rate of capital appreciation has been on the far too many residential bank re-possessions that have taken place over the past few years? Saint John’s high property tax rate is not only oppressive and an impediment to property demand and population growth, it is also a serious obstacle to many folks realizing a reasonable return on an investment they may require later in life – their home.
The next municipal election is just around the corner. If Saint John is to have a hope in hell of becoming competitive when it come to attracting and retaining businesses and families we “must” offer better value for tax dollars paid and spent.
This is not a new message: Greater accountability and transparency. Saint John has to be run like a business, the new Mayor and Council must:
Carry out a full and complete operational audit of all City Departments. ( while on that subject, how many lawyers does a community of 70,000 people need?)
The next Common Council must put in place municipal bench marking. The performance bar for all City departments must be raised.
The next Mayor and Council “must” give people a reason to choose Saint John, the property tax rate “must” be dropped even by a cent or two. Mayor and Council “must” send a message that we mean business not……. business as usual.
I will borrow a message from the late and controversial Mayor of Toronto Bob Ford
Tax, tax, tax, spend , spend, spend – the City Hall gravy train has to stop.