Property tax hikes would hurt N.B. job creators
This column was published in the New Brunswick Telegraph-Journal on June 27, 2019.
New Brunswick residents and businesses are hit with high taxes from all angles. Yet there’s a brewing debate in the province about whether property owners should be forced to pay even more. Doing so would not only make life more difficult for hardworking New Brunswickers, it would scare off investment in the province.
In December of last year, Liberal MLA Gerry Lowe introduced a private member’s bill proposing to include machinery and equipment in property tax assessments for businesses.
Lowe pulled the bill due to procedural issues, but the topic is being studied by a legislative committee.
As noted by both the Canadian Manufacturers and Exporters and the Fredericton Chamber of Commerce, the only other province that allows for such a tax scheme is Alberta, where not all municipalities have it and notably, Edmonton and Calgary are exempt.
Where Lowe got the impression that taxpayers in New Brunswick aren’t paying enough tax is hard to figure out.
The University of New Brunswick’s Atlantic Institute for Policy Research recently launched a roundtable exploring economic challenges; one being the low level of private sector investment in the province – with high costs a significant factor.
Discussing the panel, chair Dr. Herb Emery cited the potential tax hike: “We have uncertainty over governments wanting to tax machinery and equipment, or even talking about it when no other province is.”
Add this to the aging population, provincial debt and job challenges, and the idea of taxing New Brunswick businesses even more is misguided.
Of course, every government wants more revenue. Cumulatively, New Brunswick’s municipalities are facing enormous debt – nearly $1 billion altogether – and the province has just begun digging itself out of its own deep debt.
But higher taxes aren’t the answer.
Higher taxes do not always amount to higher revenues. Former premier Brian Gallant’s income tax hike over $150,000 and property tax hike on businesses didn’t generate anywhere near the promised revenue.
Why would any elected official want to fuel the fire of outmigration?
New Brunswickers already pay among the highest income taxes and business taxes and the highest sales tax in the country. A family earning $75,000 in Saint John pays nearly $3,000 more than a family in Montreal earning the same, and more than $5,500 per year than an equivalent family in Regina.
Non-residential property taxes in New Brunswick are also among the highest in Canada, and are higher than in neighbouring Nova Scotia and Quebec for most industries, according to the Canadian Manufacturers and Exporters.
On top of that, New Brunswickers are uniquely punished by a double-property tax which is costing the province investment and should be eliminated immediately.
There’s no question that governments are cash-strapped and they need to constrain their costs. They can do so by reducing spending and pushing for provincial ability-to-pay legislation, which would ensure arbitrators consider economic realities when big union deals with government go to binding arbitration.
New Brunswick’s job creators are already paying more than enough. Disincentivizing others from setting up shop in the province makes no sense for long-term growth.
More businesses, more jobs and more people will amount to more revenue in the future. Economic growth outside of government is the best way for New Brunswick to turn the tide on outmigration, dig itself out of debt and restore vibrancy to the economy.
Raising property taxes on hardworking New Brunswickers is the last thing any elected officials should be fighting for.
Paige MacPherson is Atlantic Director of the Canadian Taxpayers Federation.