Finance Minister Blaine Higgs will pursue the idea pitched by the New Brunswick Business Council to raise corporate income tax cuts to help shrink the provincial deficit.
New Brunswick has one of the lowest corporate tax rates in Canada at 10 per cent. Susan Holt, the chief executive officer of the business group, said recently the council would support raising corporate taxes back to the 2008 level of 13 per cent.
The finance minister said he has an "obligation" to follow up on the business council’s idea of raising corporate taxes.
"Corporate income tax is not a big revenue generator for us … but certainly if the businesses are willing to have that changed and recommend that," Higgs said on Wednesday.
"If we hear from more of them that is something that they really want us to do then, you know, I’d hate to disappoint them in that area."
The provincial government estimates it will collect $243.6 million in corporate income taxes in 2011-12, which is far less than the $1.2 billion in personal income taxes and $1 billion in Harmonized Sales Tax.
Corporate tax rates fell to 10 per cent in 2011, but the former Liberal government had intended the rates to fall to eight per cent by July 2012.
The Alward government halted the tax cuts at 10 per cent in 2011.
This isn't the first time a business group has raised the idea of boosting taxes in New Brunswick.
David Ganong, the chairman of St. Stephen-based Ganong Bros. Ltd., organized a meeting in 2010 that called for Alward to raise the HST.
The Progressive Conservative government, however, has refused to increase the HST.
The province’s financial situation has been worsening in recent months. Higgs announced in October the province’s projected deficit has nearly doubled to $356 million.
One of the reasons behind the higher deficit is declining revenues.
Higgs isn’t the only New Brunswick official pointing out the province’s deteriorating fiscal situation.
Auditor General Kim MacPherson also warned the Alward government in her latest report the growing debt is "a very disturbing trend."
The New Brunswick Business Council said it is currently working with the universities and other policy groups to begin a discussion on the province’s dismal fiscal situation.
"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," Holt said earlier this month.