Nfld. & Labrador

Business, labour criticize N.L. budget

The 2011 Newfoundland and Labrador budget is coming under fire from some in business, labour and the Liberal opposition.

The 2011 Newfoundland and Labrador budget is coming under fire from some people in the business and labour sectors and from the Liberal Opposition.

Luc Erjavec, vice president of the Canadian Restaurant and Foodservices Association, described yesterday's budget as an opportunity lost.

"They should have eliminated the payroll tax. They should have increased the basic personal exemption to put money back into the pockets of working Newfoundlanders and you know there's lots of things that could have stimulated our industry," he said Tuesday.

Erjavec says the budget did little to tackle high unemployment.

"The [provincial] government just opened up the election tap and spent away," he said.

The budget allocated extra billions of dollars for education, health care and an eight per cent HST rebate on home heating costs.

The budget also raises the exemption threshold on the payroll tax from $1 million to $1.2 million, but that isn't enough for Richard Alexander, executive director of the Newfoundland and Labrador Employers' Council.

"All it is really is an admission that this tax is a problem," said Alexander.

"That's why Nova Scotia doesn't have it. New Brunswick doesn't have it. P.E.I. doesn't have it."

Alexander says the most any employer will save is $4,000 per year.

Some say budget "pro-business"

Not everyone agrees the business sector was a loser in yesterday's budget. Federation of Labour president Lana Payne described the budget as "pro-business."

"It's about a $130 million investment in tax credits, tax cuts and monies to attract business to the province," said Payne.

She also said a new child-care tax credit, which could save parents about one month's worth of child-care bills, doesn't go far enough to make childcare affordable for working parents.

The government is also launching a pilot project aimed at opening more spaces in homes for care of infants and other children.

Home-heating rebate criticized

The government's plan to introduce an  home-heating fuel rebate of eight per cent  was also criticized.  Liberal Opposition leader Yvonne Jones described it as an attempt to win votes in the upcoming Oct. 11 provincial election.

"Right now, Nalcor Energy is out there with a rate application to increase everyone's electrical bill in the province by seven per cent, so it's not netting a lot of revenue."

"But it sounds good when you're talking it up on the doorsteps," said Jones.