Main menu:

History of RPE Thought

Posts by Tag

RSS New from the CCPA

  • Charting a path to $15/hour for all BC workers November 22, 2017
    In our submission to the BC Fair Wages Commission, the CCPA-BC highlighted the urgency for British Columbia to adopt a $15 minimum wage by March 2019. Read the submission. BC’s current minimum wage is a poverty-level wage. Low-wage workers need a significant boost to their income and they have been waiting a long time. Over 400,000 […]
    Canadian Centre for Policy Alternatives
  • CCPA-BC joins community, First Nation, environmental groups in call for public inquiry into fracking November 5, 2017
    Today the CCPA's BC Office joined with 16 other community, First Nation and environmental organizations to call for a full public inquiry into fracking in Britsh Columbia. The call on the new BC government is to broaden a promise first made by the NDP during the lead-up to the spring provincial election, and comes on […]
    Canadian Centre for Policy Alternatives
  • Income gap persists for racialized people, recent immigrants, Indigenous people in Canada October 27, 2017
    In the Toronto Star, CCPA-Ontario senior economist Sheila Block digs into the latest Census release to reveal the persistent income gap between racialized people, recent immigrants, Indigenous people, and the rest of Canada.
    Canadian Centre for Policy Alternatives
  • CCPA in Europe for CETA speaking tour October 17, 2017
    On September 21, Canada and the European Union announced that the Comprehensive Economic and Trade Agreement (CETA), a controversial NAFTA-plus free trade deal initiated by the Harper government and signed by Prime Minister Trudeau in 2016, was now provisionally in force. In Europe, however, more than 20 countries have yet to officially ratify the deal, […]
    Canadian Centre for Policy Alternatives
  • Twelve year study of an inner-city neighbourhood October 12, 2017
    What does twelve years of community organizing look like for a North End Winnipeg neighbourhood?  Jessica Leigh survey's those years with the Dufferin community from a community development lens.  Read full report.
    Canadian Centre for Policy Alternatives
Progressive Bloggers

Meta

Recent Blog Posts

Posts by Author

Recent Blog Comments

The Progressive Economics Forum

New Brunswick Tax Reforms: Pig in the Poke

As Andrew Jackson has written recently on this blog, the New Brunswick government is proposing a set of truly dreadful tax reforms. The proposals include:

  • a 10% flat tax for personal income, or a two-tier rate at 9% and 12%
  • reducing the corporate income tax from 13% down to as low as 5%
  • a carbon tax
  • increasing the provincial sales tax by two percentage points
  • reducing the provincial tax rate on non-residential properties by 33%
  • restraints/cuts to government spending from the shortfall in revenues

Each one of these measures is regressive in itself; combined I believe that they constitute the most regressive tax package put forward by any government anywhere in Canada.  The carbon tax is not connected to any other environmental measures and appears to be just a cash grab to finance the income and corporate tax cuts.  There are a few compensating measures that would be less regressive, including an increase in the basic personal amount, a child tax credit and a climate change tax credit, but these are relatively minor.

The New Brunswick Department of Finance released a discussion paper last month that is unfortunately highly biased, misleading and withholds information about the impacts.   The main references cited in the paper include the  C.D. Howe Institute (Jack Mintz was their main consultant), the Fraser Institute, Canadian Taxpayers Federation and even the U.S. Heritage Foundation and Arthur Laffer.  A number of these organizations have expressed strong support for these proposals.

A select committee of the N.B. legislature has been holding a fairly hasty set of consultations that are expected to wrap up next week.  They are planning to move forward with a package in the Fall and implement the reforms over the next five years.  One gets the sense that they are planning to steamroll ahead with these set of tax reforms, chosing the just slightly less offensive ones proposed.   New Brunswick already is already one of the least taxed provinces for households and business, according to both the Fraser Institute and the C.D. Howe Institute for what their measures are worth. The danger is that even deeper tax cuts would then force other provinces, and particularly other Atlantic provinces, to follow suit. 

There have been some excellent presentations to the committee opposing these proposals, including a number from New Brunswick economists and many others.  Andrew Jackson’s paper focusing on the impact on high income earners was presented by the New Brunswick Federation of Labour.

Having worked in different departments of Finance, I have to say that I was most disappointed not just by the proposals, but by how biased and miseading their discussion paper is.  Since they only included figures on the impact of the proposed income tax cuts,  I prepared a fairly comprehensive analysis of the impact of the major tax proposals on different household income quintiles in the province.

This analysis is included in the brief that CUPE’s President, Paul Moist presented yesterday, entitled Pig in the Poke.  It shows that these proposals would cost the bottom 60% of households an average of at least $500 more per year in higher taxes and the value of reduced services.  Meanwhile the top income quintile would benefit by an average of over $5,300 a year, including a $6,800 income tax cut.  There are some fairly dramatic tables and charts that illustrate the impacts in our document, as well as a critique of their main arguments.

The New Brunswick government is concerned about “self-sufficiency”, an ageing population and declines in their forestry and manufacturing industries.  It is important to propose progressive alternatives to address these concerns, but first of all these highly regressive and counter-productive tax proposals need to be stopped.

Enjoy and share:

Write a comment





Related articles