HST hike needed to balance budget, business council says
Susan Holt says 'no one wants to pay more taxes,' but debt and deficit must be erased
The New Brunswick Business Council is urging political parties to seek a mandate to raise the harmonized sales tax in the upcoming provincial election.
Susan Holt, the council’s chief executive officer, said the province’s $391-million deficit and $12.2-billion debt must be addressed by the next government. She said bumping up the harmonized sales tax is the best way to wrestle down the debt and deficit.
“The tax that delivers the most bang for its buck and is deemed to be the fairest tax is [the] consumption tax. So we think that should be on the table during this election campaign and for the next government,” she said.
“No one wants to pay more taxes, I don’t, you don’t, but I think the situation calls for it here. Otherwise, we have to make up a shortfall of around $500 million ...There is a significant deficit, and a massive debt and we are making no headway on reducing it.”
The Department of Finance has estimated that a two percentage point increase in the HST would raise $250 million. If the New Brunswick government raised the HST by two percentage points, it would return to the same level as before Prime Minister Stephen Harper began cutting the federal Goods and Services Tax.
Holt said Premier David Alward’s government has made steps at reducing spending. But she said those efforts have fallen short and more needs to be done.
Finance Minister Blaine Higgs said recently the province's economic recovery was at risk if voters switched governments.
The business council's CEO said a pitch to voters to embrace a tax hike is a “hard sell” but she said it is the right thing to do for the province’s future.
“We as voters have to give our politicians some room,” Holt said.
“We have to stop asking for everything under the sun and punishing those who don’t give us what we want to hear and recognizing the tough love is the best way forward for New Brunswick in the long run.”
NDP Leader Dominic Cardy said his candidates are hearing from citizens about the need for fiscal discipline.
“NDP campaigned on the need for balance in 2010 and it’s front and centre this time,” Cardy said in a message to CBC News.
“We have to balance the books to save health and education. Politicians using the public as an excuse for their inability to properly manage the province is really insulting to the public.”
HST increase discussed
The Alward government has mused at different times in the last four years that it was contemplating a referendum that would allow for a HST increase.
Instead, the Alward government raised personal and corporate income taxes in the 2013 budget.
The new Fiscal Transparency and Accountability Act has a provision contained in it that would allow future governments to skip a referendum on a potential tax increase if the deficit surpassed $400 million.
The $400-million deficit trigger would have been met at least four times in the last six years.
The former Liberal government posted two deficits that exceeded that amount in 2009 and 2010 and the Alward government has posted two budgets with deficits greater than $400 million.
Political parties will be forced in the upcoming election to give a full costing of every promise that is made during the campaign.