Small Business Tax Hike Sticks Out Like A Sore Thumb

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Nova Scotia’s Tax and Regulatory Review included a number of sound recommendations for the McNeil government to consider. In fact many of the recommendations put forward by CFIB in our submission can be found throughout the report.

What is completely incongruous is the suggestion that big business should benefit from a corporate tax reduction paid for by an astronomical hike in the small business tax rate. CFIB has fought to have the small business tax threshold raised to $500k from $350k since the Dexter government reduced the threshold. As identified in the report, having the lowest threshold in the country was a clearly identifiable disincentive to growth. Why, in the same breath, the author would suggest raising the small business tax is puzzling.

This plan highlights a corporate tax cut for big business at the expense of small business. This is not a drawn conclusion, it states in the report the small business tax hike is actually designed to pay for the corporate tax cut. Raising the small business rate from 3% from 8% will give Nova Scotia the honour of having the highest rate in the country. It will deter small business start-ups, act as a disincentive to immigration and lower Nova Scotia’s growth prospects.

CFIB welcomes the inclusion of many of the recommendations in this report. There are many wise and strategically sound measures. As mentioned, raising the small business tax threshold brings Nova Scotia in line with the rest of the country. Expanding the small business Equity Tax Credit may prove useful to start-ups. Seeking more interprovincial cooperation on this and other regulatory matters is also helpful.

On red tape, the report recommends naming a Minister responsible for Regulatory Modernization, creating an Office of Regulatory Modernization and launching a three-year plan to eliminate ineffective, out-dated or inefficient regulations. Nova Scotia used was a leader in regulatory reform but much of that momentum has been lost in recent years. It’s encouraging to see government taking the impact of red tape seriously so that our businesses and government can be more productive.

Regarding personal taxes we’re pleased to see a recommendation to boost the basic personal amount (the amount Nova Scotians get to keep before they begin paying taxes) and eliminating bracket creep by introducing automatic indexation so that the personal income tax system is adjusted each year with the cost of living.

How to create a better environment for small business in Nova Scotia is outlined very clearly by the Ivany Report. Much of what was included in this latest review reflects those findings and the author should be applauded for listening carefully to input and applying it to this document. In contrast, a small business tax hike sticks out like a sore thumb. CFIB will be fighting the adoption of such a strategy at every turn and strongly encourages the government to dismiss any advice in this report that would further disadvantage small business in Nova Scotia.

Nova Scotia Can Take Charge of its Immigration

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Nova Scotia needs more immigrants. After years of willful blindness to the looming demographic catastrophe, it would seem the provincial government has finally decided to recognize it as a serious problem.

Premier Stephen McNeil engaged Wadih Fares and Colin Dodds to look for creative enhancements.

The provincial Immigration department has adopted “action oriented” goals to maximize all pathways to Nova Scotia, which is to say, they are doing something about the problem.

Officials are lining up immigration with our economic goals and are retooling the skilled worker stream for international graduates.

It also appears the province has recognized the need for a more integrated approach to welcoming immigrants and is taking action using the government resources, Immigration Settlement and Integration Services (the organization soon to change its name from ISIS) and the YMCA.

These are all positive moves but one of the most important pieces of this puzzle depends on business.

On November 12, the folks from Citizenship and Immigration Canada (CIC) will be in Halifax providing information to employers on the Express Entry program being launched in January for skilled workers. It may actually give Nova Scotia a fighting chance to improve its record on attracting and retaining immigrants.

As the Ivany report rightly concluded, improving the economic outlook for Nova Scotia does not lie only with government. With Express Entry, part of the solution to our province’s lackluster immigration performance is being shifted squarely on the private sector.

Express Entry is a retooled immigration stream designed to more efficiently pair up skilled workers with employers in Canada. If this new program works as designed, the folks in the provincial immigration department believe it could open tremendous opportunities for Nova Scotia to attract talent from other countries, but it won’t work if Nova Scotia business sits on its hands.

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It isn’t going to be easy. Provinces will be competing for new Canadians. In the current economic environment Nova Scotia is starting the game with one hand tied behind its back. Taxes are higher, salaries are lower, we still have work to do to provide adequate community infrastructure for new Canadians and there are still prejudices toward immigration to overcome.

To work, it’s critical we see immediate, direct action from Nova Scotia employers willing to aggressively pursue skilled immigrants to fill labour market demand. While there is a cap on Nova Scotia Provincial Nominee Program, no such cap exists on Express Entry. If business can be paired with a worker that meets immigration criteria, the process will be streamlined for that skilled worker to come to Canada and eventually become a citizen. The feds are aiming at a six month process open to close.

Some of the result of this will presumably be a lower demand on the Provincial Nominee Program, opening up a wider array of immigration support options. Immigration also hopes to provide options through a Business Stream which will welcome entrepreneurs to Canada and offer more flexible options for business acquisition.

As our demographic decline continues, succession planning becoming a more and more serious issue in Nova Scotia. It is entire sensible to provide opportunities for small business to retire by selling their operations to new Canadians. Now is a good time for the provincial government to re-examine the punishing tax Nova Scotia businesses face when transition from one owner to another.

Out-migration, an aging population and a stagnant economy are all serious problems. The Express Entry system may be one part of the solution if it works as CIC says it will.

The Utter Foolishness of Bill 60

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Today several people made impassioned pleas to the Government of Nova Scotia to reconsider Bill 60. Among other things, Bill 60 is designed to put restrictions on vaping. Vaping is the use of devices (similar to the one shown above) which allows the user to inhale vapour created with either nicotine infused, or non-nicotine flavoured liquids.

The question is why? Where is the public outcry around the use of vaporizers? Where is the irrefutable evidence suggesting these devices are a public health menace?

The issue of vaping presumably is sitting on some desk deep in the bowels of Health Canada underneath a pile of other more pressing health issues. The federal government is dragging its feet on the matter and has been doing so for a number of years. The result of this public policy ambiguity is Nova Scotia Health Minister Leo Glavine inventing this problem, and the bill to solve it, which the government believes will stem the tide of youth smoking habits. The rationale apparently is e-cigarettes are somehow a gateway to adult smoking.

The smoking police, otherwise known as the Department of Health and Wellness, led by Chief Public Health Officer Dr. Robert “Everything Fun Is Bad For You” Strang seem to have glommed on to vaping as the next great public health scourge, people trying to quit smoking by using, what they believe and what most real evidence points to, a product that reduces harm.

Strang has fallen lock-step into the position held by Stanton Glantz, director of the University of California at San Francisco’s Center for Tobacco Control Research and Education. Glantz claims, without a shred of evidence that young people will start vaping and then move on to conventional cigarettes. Once the nicotine addiction is set, users will eventually move on to a far more harmful, essentially outlawed and more expensive habit. For the record, e-cigarettes have been around for seven years and there is not a single study in existence that would verify this claim. It is an assumption, at best.

The other assumption being made is that vaping will discourage smokers from quitting by maintaining their addiction to nicotine. If that is the case, then nicotine lozenges, sprays, gum and patches should be removed from drug stores lest they keep people on cigarettes.

Anti-smoking crusaders have done the public a huge service by eliminating indoor smoking. Countless studies indicated second-hand smoke was a danger to those in the vicinity of smokers. It served to make restaurants better places to eat for non-smokers. Since that time, legislators have moved smoking to the peripheries of society. Huddled masses now light up 30 meters away from doors, away from outdoor patios and off school grounds to avoid the pollution of cigarettes. While smokers are banned from the sidewalks on Argyle Street, diesel fumes belch from trucks and heavy machinery with nary a thought, but I digress.

Caught in the crossfire of this ridiculous legislation is another group, the purveyors of the hookah lounge. Shisha, a mollases and tobacco based concoction has been smoked for centuries in Middle eastern cultures. They have become increasingly popular in the United States and Canada because the establishments have been able to get around normal smoking bans by serving non-tobacco products such as herbs and dried fruit in their hookah pipes. Recently however, the fun police have begun to look at this as another public health concern as hookah smoking, in spite of absolutely no evidence, is unhealthy and is another gateway to tobacco use. The water in the hookah pipe extracts most of the carcinogens, making it less harmful, yet public health views this as another gateway to smoking again with no evidence.

Perhaps the thinking is if kids are vaping, even non-nicotine devices, they will eventually take up smoking because the action is the same. Much like drinking pop will of course lead to drinking alcohol. After all, it’s drinking right…people even use that as mix!

It’s a surprise that Minister Glavine and Dr. Strang have not captured Root Beer and Ginger Beer in this legislation because the manufacturers are clearly looking to set up a pattern of beer drinking among our youth.

The testimony of vapers at law amendments showed us that e-cigarettes are a useful alternative for many people who would otherwise continue puffing away. There are people who smoke. Anybody who walks by a bar or a federal building can tell you, these people exist. There is absolutely no evidence that can point to people who never would have started or who would have quit if not for e-cigarettes. Those vapers exist only in the imaginations of Leo Glavine and his Chief of the Fun Police, Dr. Strang and his ilk. So far, and until proven otherwise, when it come to tobacco-related deaths and sickness, the evidence is strongly in favors of e-cigarettes.

But the Liberals push on, with nary a care in the world they will with the stroke of a pen put more people out of business, solving a problem that nobody but a few ideologues in the Department of Health and Wellness asked them to.

Thomas Frieden, director of the U.S. Centers for Disease Control and Prevention commenting on the banning of vaping said. “I think the precautionary principle—better safe than sorry—rules here.” While the white knights of the anti-vaping league continue their campaign perhaps they should ask themselves, in what world is it “safe” to institute a ban that could potentially keep smokers from buying a product that could save their lives?

Meanwhile the Liberal’s federal counterparts are promoting the legalization of marijuana.
Go figure.