Taxpayers ask Prince Edward Island to end bracket creep, reduce spending

Author: 2022/01/27

The Canadian Taxpayers Federation is asking the King government to put an end to inflation-based tax hikes.

“With inflation soaring, ending bracket creep is more important than ever on Prince Edward Island,” said CTF Interim Atlantic Director Renaud Brossard. “Families should not get pushed into higher tax brackets if they don’t have more money in real terms.”

Tax brackets have remained at the same thresholds since 2008 in Prince Edward Island. Meanwhile, the purchasing power of a dollar has gone down by 17 per cent.

By failing to index tax brackets to inflation, the government of Prince Edward Island has been pushing people into higher tax brackets, even if they don’t have more money in real terms. This is referred to as “bracket creep.”

Bracket creep will represent a $42 tax hike for an Islander making $50,000 this year.

The CTF is also asking King to bring government employee compensation down to private sector levels.

“Bureaucrats should not get paid a premium over their private-sector peers simply because they happen to work for the government,” said Brossard. “The government needs to bring these compensation packages back to a level comparable to that of the average Islander.”

Provincial government employees in Prince Edward Island get a 15.9 per cent wage premium over the rest of the province’s labour market, when adjusting for education. This costs the island’s taxpayers $129 million per year.

Lastly, taxpayers are asking the government to divest its money-losing provincial golf courses.

“It shouldn’t fall on Islanders’ shoulders to pay the green fees for golfers at government-owned courses,” said Brossard. “If the government can’t find a way to break-even with golf, it should sell off those courses.”

In the five years before the pandemic, Islanders lost $2.5 million in golf course operations. Assuming revenue goes back to normal this year, government operated golf courses stand to lose $250,000. This is amounts to the provincial income taxes paid by 115 median Islanders.

The CTF’s entire prebudget submission is available at this https://www.taxpayer.com/media/PE%20Prebudget%202022%20-%20Recovery%20and%20growth%20for%20PEI.pdf