New Brunswick Liberals are signaling that more tax increases are coming down the pike. For starters, a law that requires the government to hold a referendum before hiking the HST or adding tolls to highways has been scrapped. Next, the Finance Minister says he’s considering a host of new taxes and tax increases.
Now a new report from the Liberals on recent budget consultations conveniently says participants want to pay more income tax, HST and road tolls.
But before they make any moves, the government should be reminded of just how much more they are already taking from the pockets of taxpayers.
In the last five years, the government has raised a dizzying number of taxes: income taxes, business property taxes, gas taxes, and increased fees for everything from drivers licenses to hunting licenses. If this drives you to the liquor store to drown your sorrows, watch out -- the government has also raised the prices there.
All of these tax increases have resulted in a massive tax haul for the government. In July 2013 income tax increases cost a worker earning $60,000 about $796 more in taxes each year. In the last five years, taxpayers and businesses have shelled out $750 million more, with New Brunswick’s “own source revenues” climbing 18.5 per cent. In contrast, between 2009 and 2013 the provincial economy grew an average of just 0.1 per cent per year.
Despite already raking in all of this new tax money in a sluggish economy, the Finance Minister has said a hike in the HST is on the table. An increase of 2 percentage points in Nova Scotia in 2010 cost families earning between $60,000 and $100,000 an extra $631.
When politicians cannot raise existing taxes by any more, they create new taxes. That’s exactly what is happening now. Finance Minister Melanson says he’s open to charging a new carbon tax. A carbon tax would be on top of all of the income, excise and sales taxes we already pay on things like gasoline and home heating fuel just to name a few.
New Brunswick’s Tourism Minister says a hotel tax may also be in the province’s future.
Premier Gallant revived the idea of charging new road tolls on provincial highways. Any toll would be over and above the gas tax you pay which is supposed to go to supporting highway maintenance.
While the government has been digging deeper into taxpayers’ pockets, government spending is on the rise. Total spending is up about $700 million over the same five year time period. Over the last ten years, the government has added about $2.5 billion in new spending to the books.
When is enough enough?
Had the government held the line on spending in 2009, the budget would be close to being balanced by now.
Instead, the government says they need to find another $600 million dollars to balance the budget.
The decision by the Liberal government to launch a program review to save money is good, but the process is taking so long that it may be another whole year before the government does anything substantial.
As the government drags its feet, the provincial debt grows by about a little over $1 million every day, and our politicians’ courage to do something about it dwindles the closer they get to the next provincial election.
We need the government to take action now.
The choices are not easy, but it’s time to focus on cutting spending.
A few options are rolling back hand-outs to businesses, selling crown agencies like NB Liquor and cancelling native taxation agreements that see $20 million collected in taxes from New Brunswickers but never remitted to the government.
Spending reductions in those areas will no doubt cause howls from some affected interest groups and individuals. But making cuts to things the government does not need to do allows it to focus on things the government should be doing.
Tax increases have been done and done again. That is the wrong path. It is time to control spending.
Kevin Lacey is Atlantic Director with the Canadian Taxpayers Federation. You can find more information at taxpayer.com
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