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.