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  • Canada’s Fossil-Fuelled Pensions June 22, 2018
    The British Columbia Investment Management Corporation is the steward of BC’s public pensions, but bankrolls companies whose current business models exceed the climate change targets agreed to in the Paris Agreement to which Canada is a signatory. The pensions of over 500,000 British Columbians and assets worth $135 billion are managed by the Corporation—-one of Canada's largest […]
    Canadian Centre for Policy Alternatives
  • Imagine a Winnipeg...2018 Alternative Municipal Budget June 18, 2018
    Climate change; stagnant global economic growth; political polarization; growing inequality.  Our city finds itself dealing with all these issues, and more at once. The 2018 Alternative Municipal Budget (AMB) is a community response that shows how the city can deal with all these issues and balance the budget.
    Canadian Centre for Policy Alternatives
  • Why would a boom town need charity? Inequities in Saskatchewan’s oil boom and bust May 23, 2018
    When we think of a “boomtown,” we often imagine a formerly sleepy rural town suddenly awash in wealth and economic expansion. It might surprise some to learn that for many municipalities in oil-producing regions in Saskatchewan, the costs of servicing the oil boom can outweigh the benefits. A Prairie Patchwork: Reliance on Oil Industry Philanthropy […]
    Canadian Centre for Policy Alternatives
  • What are Canada’s energy options in a carbon-constrained world? May 1, 2018
    Canada faces some very difficult choices in maintaining energy security while meeting emissions reduction targets.  A new study by veteran earth scientist David Hughes—published through the Corporate Mapping Project, the Canadian Centre for Policy Alternatives and the Parkland Institute—is a comprehensive assessment of Canada’s energy systems in light of the need to maintain energy security and […]
    Canadian Centre for Policy Alternatives
  • The 2018 Living Wage for Metro Vancouver April 25, 2018
    The cost of raising a family in British Columbia increased slightly from 2017 to 2018. A $20.91 hourly wage is needed to cover the costs of raising a family in Metro Vancouver, up from $20.61 per hour in 2017 due to soaring housing costs. This is the hourly wage that two working parents with two young children […]
    Canadian Centre for Policy Alternatives
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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.

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