The Cost of Broad Relief

The New Brunswick government spends more than $2 million a month on electricity assistance for the highest income households in the province. This spending continues despite record provincial deficits.

According to a recent CBC News report, the provincial sales tax rebate on residential electricity bills rewards high consumption over financial need. When you look at your monthly power bill, you see this rebate applied directly to your total. However, the broad application of this tax break means those who use the most power get the most money back.

How the Numbers Break Down

Statistics Canada data from 2023 shows the top 20 percent of New Brunswick households use substantially more electricity than low and middle income households. This top group includes about 70,000 households earning over $134,000 a year. They consume 40 percent more electricity than middle income homes and double the amount of the lowest income group.

Because the rebate applies to the total bill, higher consumption generates more government assistance. The highest income homes received about $36 million in electricity assistance over the past 16 months. The lowest income homes received just $18 million during that same period.

Government Defends the Program

Finance Minister René Legacy defends the expense. He argues lower income groups still benefit from the program.

“We wanted to do something quickly,” Legacy said. “And if a few people got some benefits that maybe they don’t need, to give benefit to the whole, it was a price that we were willing to pay.”

Legacy acknowledges the program adds to the provincial debt but insists it provides necessary relief to New Brunswickers.

The Push for Targeted Relief

Advocates argue the province must direct limited funds to those who need them most. The Saint John based Human Development Council recently released a report on energy poverty. The report shows low income families spend a much higher percentage of their budgets on electricity.

Randy Hatfield serves as the executive director of the Human Development Council. He believes the government needs to rethink its approach.

“If there are scarce resources, and there’s a huge challenge for a significant portion of the population, and if the goal is to reduce energy poverty, then targeting is not only more efficient, but it’s more effective,” Hatfield said.

The Energy and Utilities Board agrees. In a recent decision granting NB Power a rate increase, the board recommended the provincial government offer targeted relief to residents experiencing energy poverty.

Frequently Asked Questions

What is the New Brunswick electricity rebate?

The rebate removes the provincial sales tax portion from residential electricity bills to help residents manage the rising cost of living.

Who benefits the most from the rebate?

High income households benefit the most. They consume more electricity and therefore receive a larger tax reduction on their higher bills.

How much does the program cost the province?

The provincial government has spent an estimated $130 million on the rebate program so far. This spending directly adds to the provincial deficit.

What is energy poverty?

Energy poverty occurs when a household spends a disproportionately high percentage of its income on utility bills. This issue primarily affects low income families.