Earlier this month, Liberals forced a debate in the legislature on its idea to make electricity free of provincial tax beginning on Jan. 1. At the time, they provided no estimate of how large or small the benefit to individual households might be under the policy. 

But according to consumption profiles of residential electricity customers in New Brunswick, benefits would range from below $60 per year for thousands of households to above $500 for thousands of others.   

In the case of the highest consumption households, the tax benefit would be worth more than $750.

Liberal Leader Susan Holt says every household would get something if the province eliminated its part of the HST on electricity bills. (Jacques Poitras/CBC)

In an interview, Opposition Liberal Leader Susan Holt said her party understands its idea would not precisely target financial help to those who need it the most. However, the plan has the advantage of providing at least some money to every household, she argued, and unlike other complex government programs could be easily implemented

"We did think that the time for a blunt instrument was now, and that can provide relief to people quickly in a way that doesn't add a lot of bureaucracy into the mix," said Holt about the proposal..

There are just under 400,000 residential electricity customers in New Brunswick served by N.B. Power and three smaller municipal utilities in Saint John, Edmundston and Perth-Andover.  

In 2022, combined residential electricity bills issued by the group exceeded $700 million, with more than $100 million in HST charged on that amount.

The provincial share of that tax was over $70 million.

According to data filed by N.B. Power with the New Brunswick Energy and Utilities Board, its average residential customer in 2022 paid $1,859.63 for electricity before taxes.

Bathurst West-Beresford Liberal MLA René Legacy led debate in the legislature on the motion to eliminate provincial tax on residential electricity bills earlier this month. Government MLAs eventually voted against the idea. (Jacques Poitras/CBC)

Given that, and a rate increase implemented in 2023, the average N.B. Power residential customer would save about  $192 per year beginning in 2024 if provincial sales tax were dropped from bills.

However, there is a wide dispersion of customers above and below that average, depending on whether they live in apartments or large or small houses, whether they heat with electricity or other fuels or drive an electric vehicle they charge at home.

There is also uncertainly over who receives the highest bills and would reap the largest benefits — low or high-income households.

The Saint John development of Anchorage Estates has large homes with sweeping views of the St. John River. It's unclear whether houses in neighbourhoods like this or drafty older homes in less affluent areas would benefit the most from eliminating provincial tax on electricity. (Google Earth)

According to N.B. Power, more than 33,000 of the households it serves, mostly people in apartments, use under 2,500 kilowatt hours of electricity per year.   

Those customers would save $30 or less if they paid no provincial sales tax on that consumption.T hey would also save another $2.46 a month in tax on service fees applied to every residential bill, for total savings of just under $60 a year.

By contrast N.B. Power has nearly 5,700 residential customers who used more than 40,000 kilowatt hours of electricity in 2022, including 350 who consumed more than 60,000 kilowatt hours. 

The provincial sales tax on every 10,000 kilowatt hours of electricity sold to an N.B. Power residential customer is currently $121.15. Under the Liberal plan, this would put savings for households in the high consumption groups at $500 per year or more. 

During debate in the legislature about eliminating the provincial tax on electricity bills, Bathurst West-Beresford Liberal MLA René Legacy said the biggest savings for large consumers is a positive element of the plan because those households tend to be headed by moderate and low-income residents stuck in drafty houses they cannot afford to fix.

"They can't insulate properly," Legacy said. "They can't pay for a new heat source that is more efficient They can;t buy those windows and door that seal properly and keep the cold out.

"Those are often the larger bills and those are the people that will see the most benefit from the removal of PST [provincial sales tax] on their bills."

New Brunswick residents living in apartment buildings consume limited amounts of electricity. Many would receive $5 per month or less from a plan to eliminate sales tax on power bills. (Connell Smith/CBC)

But Holt acknowledged Liberals do not have any hard data to know for sure how many large residential electricity users are low-income households struggling in inadequate housing and how many are the opposite — affluent households powering an upscale lifestyle.

"We don't have that granular level of detail," Holt said.

"This is a broad-based tool to provide some savings to a large number of New Brunswickers because there's a lot of people telling us they can't make ends meet right now."

In his remarks in the legislature, Legacy acknowledged it might be better if a $70 million aid package for residents directed money to where it was most needed but wasn't sure what that might be. 

"Why would we eliminate the tax for the more comfortable amongst us," asked Legacy rhetorically, outlining a criticism of the Liberal plan.

"Should we not only do it based on financial circumstances of the individuals or families? Sure. If government could find a way to do this simply without overburdening the process it would be great."