The New Brunswick Business Council is advocating the provincial government raise corporate income tax rates back to 2008 levels.
The council, which represents the province’s largest employers, has already come out against the Alward government’s plan to introduce property tax cuts, which will benefit businesses.
The property tax cut will cost the cash-strapped government $49 million.
Susan Holt, the chief executive officer of the New Brunswick Business Council, said the provincial government should consider boosting the corporate tax rate from 10 per cent back to 13 per cent.
"[The business] council is comfortable with the idea of increasing the corporate income tax rate back to the previous levels under the guise of keeping it competitive," Holt said.
"It doesn’t have to be the lowest in Canada but we still believe it has to be at a competitive level with other provinces and states but we think there is room to move."
Finance Minister Blaine Higgs announced last month the province’s projected deficit has nearly doubled to $356 million.
The province’s auditor general also warned the Alward government in her latest report the growing debt is "a very disturbing trend."
Holt said the business council is currently working with the universities and other policy groups to begin a discussion on the province’s dismal fiscal situation.
She said the council’s members understand the province’s finances need to turn around.
"Business council members believe that our fiscal challenge is great and that we all need to do our part to help New Brunswick get to a place where its debt is not crippling and we believe our economy can sustain an increase to our corporate tax," she said.
Council never supported tax cuts
The province’s corporate tax rate stood at 13 per cent in 2008, but it started to drop as a part of former premier Shawn Graham’s tax reform package.
Corporate tax rates fell to 10 per cent in 2011, but the Graham government had intended the rates to fall to eight per cent by July 2012.
The Alward government halted the tax cuts in 2011.
Holt said the business council was never supportive of the tax cuts, but they did not speak up at the time.
"We didn’t go out publicly because we didn’t want to hang Shawn out to dry but we didn’t think that was a move the economy needed at the time," Holt said.
"I think we were proven out that those reductions didn’t stimulate the economy the way that they anticipated. So business council members believe that similarly returning the corporate tax to where it had been will not cripple the economy given that we didn’t see the gains from the reduction."