HALIFAX – The Nova Scotia NDP believes a 2 percent cut in corporate tax handed out by the McNeil Liberals in 2020 did little to benefit the average Nova Scotian. If elected to form a government, the NDP promises to raise the province’s corporate tax rate from 14 percent to 16 percent.
When the tax cuts were announced in February 2020, then Prime Minister Stephen McNeil described them as an economic investment. He also announced that the small business tax would be reduced from 3 to 2.5 percent. The cuts officially took effect in April 2020.
“This is an investment in you,” McNeil announced at a Chamber of Commerce event in Halifax. “And honestly, I hope you turn around and reinvest in Nova Scotians.”
However, Nova Scotia NDP chief Gary Burrill says there is little evidence that the $ 70 million corporate tax cut has created more jobs in the province. He notes that the cuts were “unconditional” so there was no pressure on companies to reinvest the money.
“If companies treat it as a godsend, they are not violating the way the tax break was set up,” Burrill said.
“So to argue that the 16 percent change to 14 percent will involve investment in job creation, I think contradicts the evidence.”
Burrill also said the province needs as much revenue from the pandemic as possible. Nova Scotia needs to invest more money in areas such as long-term care, mental health, and childcare, among other things.
“Since likely World War II, the government’s need for revenue to keep the economy going has never been so great,” Burrill said.
However, the Halifax Chamber of Commerce believes the region needs to have a competitive tax rate in order to attract businesses. Kent Roberts, the Chamber’s vice-president, says he disagrees with the idea of increasing corporate taxes.
“If we are to attract business here and keep business we have to be competitive,” said Roberts. “And this rollback of the liberal government was only a small step in the right direction. So we would be absolutely against any change to this previously implemented policy.
According to Burrill, the NDP plans to keep the small business tax at 2.5 percent.
The NDP also announced this week that if elected to form a government, it would take steps to strengthen rent control in the province. The first step, says Burrill, is to transform rent control from a temporary instrument that the Liberals created through the Emergency Act into a permanent one.
In 2018, the NDP presented the Rental Fairness and Affordability Act, which calls for the consumer price index to limit rent. However, the law allows landlords to apply for exemptions if they can demonstrate that they have invested in modernizing and maintaining their buildings.
“Landlords can request exemptions from the cap for exceptional expenses or investments,” Burrill explains.
“So it’s not a one-size-fits-all issue.”
Nor does Burrill support the argument that the rent brake is preventing property developers from building new buildings and increasing vacancy rates. He says that many large cities across Canada have a rental price control and did not prevent the new development.
“In Toronto there is a fixed rental price. You have a rental price control in Vancouver; they have it in Winnipeg and Montreal. In none of these places has anyone had any experience of being hindered by the rent cap, ”he said.
“Well, I think that’s a wrong line of argument…. Rent control is not a new idea. The majority of Canadians now live in controlled rental jurisdictions. “