Province cutting income taxes, property taxes
Premier says lower taxes will help New Brunswick attract more people
The Higgs government has ramped up tax reductions as part of what it says is a strategy to make New Brunswick more affordable and more attractive.
Under legislation introduced Tuesday, personal income tax rates will be cut in four tax brackets, with the largest reduction on incomes between $142,534 and $162,383 per year.
That bracket is being eliminated, with incomes in that bracket becoming part of the third bracket, dropping their provincial rate from 17.84 per cent to 16 per cent — a reduction of 1.84 percentage points.
Other brackets will see smaller reductions.
Incomes from $43,835 to $87,671 will see a smaller reduction, for example, from 14.82 per cent to 14 per cent.
Aiming for 'balance,' premier says
Premier Blaine Higgs defended giving the largest cut to higher incomes, saying it was part of a "balance" he was striking and the reduction could help attract more doctors to the province.
"You cannot expect people to come and invest and work if their taxation levels are such that you're not considered a desirable place," he said.
"It has to be a holistic view on what works, so New Brunswick is looked at."
The province also announced tax changes aimed at giving developers and landlords incentives to produce more housing.
Legislation will move up to next year the date for its phased-in reduction by 50 per cent of the provincial property tax rate on non-owner-occupied residential properties, such as apartment buildings.
That was supposed to be completed in 2024 but it will happen in 2023 instead.
No decision on rent cap
And assessments on newly built apartment buildings will be phased in over three years, with assessed values cut to one-third of the total in the first year and two-thirds of the total in the second year.
"We know there is a supply issue," said Housing Minister Jill Green.
She said she was still not ready to say whether a cap on rent increases for 2022 would be extended into next year.
The two opposition parties at the legislature questioned the income tax cuts, but to different degrees.
"Who am I to stand here and say that it's not good to cut taxes?" said Liberal finance critic René Legacy.
But he said tax cuts alone won't make life more affordable.
"The question, though, is you cut taxes and the relief is only going to be a year later. You can't take it in isolation. It can't be the excuse for solving everything, that we've cut taxes and everything is good now."
Green MLA Kevin Arseneau said tilting most of the savings to higher income brackets was a sign of the government's skewed priorities.
"This government has helped people that have problems making their latest payments on their Porsche, and not people who have trouble eating, paying for their housing, paying for their basic needs," he said.
In 2021 and 2022, the government cut the tax rate for the lowest income bracket and raised the threshold below which people pay no provincial income tax at all.
Tuesday's bill had no rate reduction for the lowest bracket and no increase to the threshold.