Auditor general challenges tax breaks for agriculture fair groups

Auditor General Kim MacPherson says 13 agricultural fair associations in New Brunswick may be getting tax breaks unfairly and is calling for improvedprovincial oversight of the groups.

MacPherson's report concluded there is no government oversight of agricultural fair associations by the Department of Agriculture, Aquaculture and Fisheries as set out in legislation.

"A lack of action by DAAF to address non-compliance allows all parties to continue as they wish, with no regard for legislative requirements and no plan to to further the legislated purpose for the existence of these organizations in provincial legislation," the report said.

MacPherson'sreport estimated the assessment value of property attributed to the agriculture associations was $12.8 million, resulting in foregone property tax revenue for all taxing authoritiesof approximately $468,000, of which local taxing authorities would have received $244,513.

"We expected, at a minimum that SNB would evaluate whether agricultural societies and fair associationsmet the criteria," states the report.

"This should include specifically verifying the properties were 'occupied'by the associations in question and met the sole use criteria specified in legislation."

Service New Brunswick officials indicated to MacPherson that while they don't have a formal process, they may complete an informal evaluation when a request is made for an exemption.

The 13 agricultural fair associations acknowledged by the provinceare:

• Albert County Fair
• Fredericton Exhibition Ltd.
• Kent County Agricultural Fair
• Kings County Agricultural Fair
• Saint-Isidore Regional Fair
• MiramichiAgricultural Exhibition Association
• Napan Agricultural Show
• Port Elgin Agricultural Fair
• Queens County Fair
• Saint John Exhibition
• Stanley Fair
• Westmorland County Fair
• Woodstock Old Home Week Agricultural Exhibition

In addition to possible property tax exemptions, the agricultural fair associations receive grants from the province, can apply for a licence to stage charitable gaming programsand can be eligible for income tax exemptions.

MacPhersonrecommended the agriculture department fulfil its legislated mandate under the Agriculture Associations Act and develop a strategy to further define its mandate.

Alternatively, if it doesn't intend to meet its current mandate, MacPherson recommends the department pursue amendments to the related legislative amendments and regulations.

The department stated it believed the act and regulations wereoutdated and itindicated it would amend or repeal all or part of the act.