GUYSBOROUGH – A recently completed review of Canso’s disputed local tax structure – under which some residents pay as much as three times the annual levy paid by counterparts elsewhere in the Municipality of the District of Guysborough (MODG) – does not recommend reducing the additional area rate applied to properties there.
Instead, professional services firm KPMG proposes a series of structural changes aimed at aligning taxation and service funding more closely across the municipality, including a review of policing costs and deployment, a shift to a standardized sewer user-fee model and a provincial review of local property assessment methods.
KPMG presented its findings Feb. 18 during municipal council’s committee of the whole (COW) meeting, which voted to receive the draft report and is now reviewing its contents.
“No decisions have been made,” municipal spokesperson Christina Bowie told The Journal in an email last week. “Further discussion will take place through council’s regular process.”
The report, commissioned last fall by MODG, examined tax fairness, service levels and overall tax burden in the Canso area following years of complaints from some residents and business representatives that the additional local rate is inequitable.
Under the current structure, properties in the former Town of Canso, which was amalgamated into MODG in 2012, are subject to an additional area rate of $1.5145 per $100 of residential and resource assessment and $1.3470 per $100 of commercial assessment. Those levies are applied on top of the municipality’s general tax rates of $0.77 per $100 for residential and resource properties and $2.74 per $100 for commercial properties across MODG.
Among KPMG’s central conclusions is that concerns about fairness in Canso’s tax structure are driven largely by comparatively low property assessments rather than by the tax rate.
According to the presentation, residential properties in Canso are assessed on average at about 60 per cent of the value of similar properties in neighbouring districts. Because municipal taxes are applied to assessed value, that gap results in comparable overall tax bills being generated from a smaller assessment base.
The consultants point to the province’s capped assessment program as a factor that has amplified those disparities by limiting how quickly taxable values can rise on long-held properties, thereby suppressing growth in the local tax base.
The analysis also notes that Canso contributes about $820,000 annually in municipal tax revenue, a figure the consultants say is broadly consistent with contributions from other districts when measured against service levels and municipal expenditures, with roughly 53 per cent generated through the additional local services rate.
The report also states that MODG has funded significant capital improvements in Canso since amalgamation through the general tax base, including infrastructure upgrades and recreational facilities.
Meanwhile, the review finds that the additional local services rate applied in Canso since amalgamation has been used to fund services – including policing and sewer – that in other parts of the municipality are financed through different mechanisms, such as user fees or the general tax base.
Bruce Peever, a partner with KPMG Canada’s public sector practice and one of the consultants who presented the findings to council, said the firm did not encounter a comparable structure elsewhere in Nova Scotia.
“We found through our jurisdictional review that Canso’s structure is unique among Nova Scotia municipalities,” Peever told council during the Feb. 18 meeting. “We didn’t find the same tax structure in any of the other amalgamated municipalities in Nova Scotia.”
Rather than recommending a direct reduction or elimination of the additional area rate, KPMG instead proposes a series of structural changes intended to align taxation and service funding more closely with practices elsewhere in the municipality.
Those recommendations include petitioning the Nova Scotia Minister of Justice to review the policing model for District 8 of MODG – specifically the use of dedicated versus shared policing resources – with the objective of incorporating the cost of the Canso detachment into the municipality’s general tax base. The consultants further recommend the minister evaluate whether an ongoing operational need exists for maintaining the detachment in Canso.
The report also recommends transitioning Canso to an equivalent-unit sewer fee structure for recovering sewer costs in District 8, aligning it with the model used by MODG’s other sewer systems. Consultants say such a change would require a study to determine the appropriate rate needed to recover the cost-of-service delivery.
Separately, KPMG recommends requesting a review by Property Valuation Services Corporation of the assessment models used within MODG to provide residents with greater transparency regarding assessment factors and methodology. The review would consider broader market influences beyond district boundaries and evaluate whether adjustments to assessment boundaries or market inputs are warranted.
Neither Harold Roberts, president of the Canso and Area Development Association, nor Billy Bond, president of the Eastern Guysborough County Ratepayers Association, said they had yet received or reviewed the full report.
“It’s always better to read the full report before you offer an informed opinion,” Roberts told The Journal. “There has to be transparency around this.”
Bond said members of his group were also waiting to review the document. “We’ve got to get our hands on the report and get the group together to go through it,” he said.
Asked whether the report would be shared with the ratepayers’ association or made public, MODG spokesperson Bowie said, “Council is currently reviewing the document and will publicly communicate when a decision regarding the local area rate for Canso is made.”
She did not indicate when that decision was expected.
