#CFIB gives #Halifax Budget a B-. Positive steps for #smallbiz but still lots of work ahead. http://ow.ly/i/ayW3K
CFIB give Halifax Budget a B-
The areas of biggest benefit to small business are:
- A slight reduction in the commercial tax rate
- A balanced budget
- Tightening of spending
CFIB members asked HRM to reduce the commercial tax burden by reducing the gap between residential and commercial tax rates. In 2014/2015, Halifax’s tax gap was one of the highest in Canada at 3.22. This years’ budget shows a slight reduction in commercial tax rates for a second year in a row. This is a positive step but HRM must address the issue of rising assessments which causes higher commercial property tax payments.
“Halifax’s property tax gap marginally improved to 3.16 but more needs to be done,” said Nick Langley, CFIB’s Director of Provincial Affairs, Nova Scotia. “Commercial owners are paying 3.16 times more for the same value residential property, but they do not enjoy the same services such as garbage collection. We hope to work with the Finance and Audit Committee to develop a multi-year plan to reduce the tax gap to 2:1.”
CFIB members will be pleased to see a balanced budget with reduction in HRM’s debt, reducing the amount spent on debt servicing. CFIB has expressed concern, over many years, about the rate of spending growth which over a ten year period was three times higher than it should have been. We commend HRM for keeping spending increases at 3 per cent which is in line with inflation and population growth.
On the other hand, growth in salaries and other employee compensation remains a problem. 40 per cent of the budget or $346 million is salaries and benefits. In 2015/2016, Halifax is adding to its budgetary pressures by adding 63 new employee positions to the 4,200 Halifax FTEs and increasing Halifax’s “pay bands” or the range of salaries for public officials.
“Halifax’s public sector has grown considerably over the past ten years and we are adding an additional 63 FTEs this year,” noted Langley, “We need to question why HRM’s bureaucracy continues to grow at this pace and examine compensation levels to ensure they are in line with private sector equivalents.” The Halifax budget also states that there is a current unfunded pension liability of $200 million.
Two other issues of concern to small business that were not covered in this year’s budget were any measure to address red tape and a means to address the costs imposed by Halifax Water. Multiple Halifax Water rate increases and the increased wastewater and storm water charges are having an impact on small business, which amount to a hidden tax on small businesses. Small businesses in Halifax face an array escalating costs and CFIB wants Halifax Council to address Halifax Water issues in a more manageable and transparent manner.
CFIB has consistently emphasized the biggest issues facing SMEs in Halifax are taxes and municipal and provincial red tape.