Auditor General finds several areas lacking oversight and monitoring around agricultural fair associations15 June 2016
FREDERICTON (GNB) – Auditor General Kim MacPherson released today in her report, her findings from work performed on agricultural fair associations operating in the province.
MacPherson found the Department of Agriculture, Aquaculture and Fisheries does not supervise or control the 13 agricultural fair associations in New Brunswick as prescribed under the Agricultural Associations Act. The department stated it believed the act and regulations in question are outdated.
MacPherson recommended the department fulfill its legislated mandate or alternatively pursue legislative amendments to the act. The department in its response indicated it would amend or repeal all or part of the act.
It was also found that by virtue of being classified as agriculture fair associations or agricultural societies, the 13 entities can be exempted from property taxes and income taxes and may also benefit from charitable gaming privileges.
MacPherson concluded that there is limited initial assessment to determine if entities are eligible to receive exemptions and benefits. Additionally, there is also a lack of ongoing monitoring to ensure requirements continue to be met.
“We found that tax exemptions and other benefits received by agricultural fair associations can be significant,” said MacPherson. “We made several recommendations to multiple departments in order to ensure these exemptions and benefits are given based on eligibility. I am pleased to see that responses received from the departments were favorable and I look forward to see the implementation of our recommendations.”
MacPherson made a number of recommendations to four different departments.
Recommendations to the Department of Agriculture, Aquaculture and Fisheries include:
- fulfill its legislated mandate under the Agricultural Associations Act, or pursue legislative amendments; and
- communicate, and monitor minimum reporting requirements for all agricultural associations and societies.
Recommendations to Service New Brunswick include:
- follow its internal standard and re-assess any agricultural fair association exceeding the 10-year assessment cycle along with evaluating the eligibility of these organizations for exemption from property tax.
Recommendation to the Department of Public Safety:
- develop a standardized process and implement associated procedures for evaluating initial and ongoing eligibility of agricultural fair associations for licensing under the charitable gaming program.
Recommendation to the Department of Finance:
- request Canada Revenue Agency undertake audits of agricultural fair associations currently exempted from provincial income tax to verify the eligibility status of these organizations.
The chapter of agricultural fair associations can be found in Volume I of the 2016 Auditor General Report, which contains three new performance reports. The volume and one page summaries for the chapters are available online.