U.S. Investigating Whether N.B.’s Cheap Property Taxes on Forests Break Trade Rules

The U.S. Commerce Department in Washington is set to rule in June whether cheap property taxes charged by New Brunswick on privately owned forests in the province are a subsidy.

It’s a decision that could mean trouble for more than 40,000 New Brunswick landowners and force a hard look by Fredericton lawmakers at the way the majority of private property in the province is assessed and taxed.

So far the New Brunswick government is not commenting on what will happen if the ruling goes poorly.

“Our government is confident that our property tax policies do not constitute a countervailable subsidy,” said Robert Duguay, a spokesperson for the province’s Intergovernmental Affairs division, in a statement to CBC News late Sunday.

“We continue to fight this unfair US trade action.”

In a hearing inside the Herbert Hoover Building in Washington last month, lawyers for a collection of U.S. lumber companies argued New Brunswick’s practice of assessing and taxing forest properties as though they are worth $100 per hectare is artificially low and a clear government benefit to private owners of timberland.

Forest properties on the open market in New Brunswick generally sell for prices much higher than that.

“The New Brunswick Assessment Act states that all real property shall be assessed at its real and true value but freehold timberland shall be assessed at 100 Canadian dollars per hectare,” said Sophia Lin, one of the lawyers representing the U.S. lumber companies at the March 25 hearing.

“This shows special treatment of timberland properties, as opposed to other types of properties, which are assessed based on its real and true value.”