Higgs pledges to cut provincial sales-tax rate if re-elected
Reduction of HST to 13 per cent would be implemented over two years, costing government estimated $450M
Premier Blaine Higgs, speaking as leader of the provincial Progressive Conservatives, said Thursday he'd reduce the province's harmonized sales tax to 13 per cent — if he is re-elected this year.
Higgs appeared at a news conference in Moncton, while several cabinet ministers, with Progressive Conservative candidates, gathered at three other locations across New Brunswick to make the co-ordinated election promise.
"We're able to do this because we can and because we've been fiscally responsible since we started, since the very beginning," Higgs said of the promised tax cut.
Higgs said the harmonized tax would be reduced to 14 per cent as part of the 2025 budget, then reduced to 13 per cent in 2026.
"All the while, we'll maintain our balanced budget," he said.
The writ hasn't yet been dropped, but the co-ordinated announcement appeared to be a campaign salvo by the Progressive Conservatives ahead of this year's election, which must be held by Oct. 21.
Social Development Minister Jill Green participated in the PC Party's four-city news conference Thursday. (Ed Hunter/CBC)
The harmonized sales tax, a federal-provincial tax created in the late 1990s, originally stood at 15 per cent, with a federal rate of seven and provincial rate of eight per cent.
The tax applies to all goods and services sold in the province, with some exceptions including basic food products and prescription drugs.
Former prime minister Stephen Harper cut the federal portion to five per cent in 2006, and in 2016, former New Brunswick premier Brian Gallant raised the provincial portion to 10, bringing the total rate back up to 15 per cent.
Following the announcement, Higgs fielded questions from reporters about why his government is waiting until after an election to reduce the tax, rather than now or in previous years.
Higgs said reducing the HST has to be legislated in a move done typically around the budget's release. He also said that doing so immediately would require businesses to make "changes in everything they do."
He added that the province previously wasn't in good enough shape fiscally to reduce the tax, referring to previous decisions by his government to delay or cancel certain capital projects early on in its mandate, coupled with budget surpluses aimed at lowering the provincial debt.
"We have a team that's focused on, on doing what's right for New Brunswick, but doing it in a way that we can prudently manage it," Higgs said.
Higgs also revealed Thursday that reducing the provincial portion of the HST by two percentage points would lower annual government revenue by about $450 million.
He was asked how the government would be able bear that reduction in revenue while handling the demands on health care and social services brought on by record-high population growth seen in recent years.
In response, Higgs said his government would promote greater efficiencies within departments, as well as more collaboration between the Horizon and Vitalité health networks.
"We're looking under the hood to work with people on the floor in the hospitals or in a nursing home," he said.
"When everyone is looking for what they can do differently or how they can improve what they do, and how we can help them to improve what they do, it makes a huge impact."
Citizens need help today, say critics
Higgs's election promise was met with criticism from his political opponents, including Liberal Leader Susan Holt, who framed it as a desperate attempt to buy votes.
She said her party has proposed things his government could do immediately to help New Brunswickers with the cost of living, without significantly reducing revenue available for services like health care.
"Our team has committed to taking the [provincial sales] tax off electricity bills as an essential item to help people today. We have committed to take Higgs's fuel tax off the price of gas. We have committed to putting a rent cap in place and to overhauling the property tax system to make sure people can afford to live in their homes," Holt said.
The "fuel tax" refers to a clean fuel surcharge on motor fuels the Higgs government has allowed suppliers to pass on to consumers to deal with new federal regulations.
Holt said her party has not committed to any tax increases if elected, and would deliver a balanced budget and continue to pay down the provincial debt.
Green Party Leader David Coon said at a time when the province's health-care system is in "a death spiral," he thinks it's unreasonable for Higgs to talk about reducing the taxes that help pay for doctors and nurses.
"First things first, we need to fix the health-care system, ensure people have access to a permanent family care team, and get rid of the waiting list before we look at significant tax cuts on the scale that the premier's talking about," Coon said.
Green
Party Leader David Coon said it's unreasonable for the Progressive
Conservatives to pledge reducing the provincial sales tax when the
province's health-care system is in a 'death spiral.' (Ed Hunter/CBC)
As for plans to reduce the cost of living, Coon said a Green government would implement a rent cap, revamp the property assessment system and alter climate change policies to put less of the financial burden on individuals, and more of it on large industrial emitters.
"[That's] where the greatest amount of carbon pollution is coming from, and it's industry that has the greatest number of alternatives for reducing their carbon emissions and therefore avoiding paying ... the price on carbon."
Tax reduction is bad fiscal policy, says economist
If the goal is to help New Brunswickers most in need while maintaining essential services, reducing the sales-tax rate is one of the worst fiscal policies that could be implemented, said Richard Saillant, a Moncton economist and public policy consultant.
"This is probably one of the worst moves that he can make as a premier. It's not a sign of leadership," Saillant said.
As an example, Saillant said a household that spends $200,000 per year will save $4,000 based on the tax cut, whereas a middle-class family that spends $50,000 will save just $400.
That makes the tax cut a very "inefficient" way of helping those who need it the most, he said.
Economist
Richard Saillant says rather than reducing sales tax, more targeted
spending would better help New Brunswickers who need the most help. (Jacques Poitras/CBC)
"I wish that we would have found a way more creative way to use what's likely to be about $500 million a year, to focus on those that truly need help," he said.
Making the proposal even worse, Saillant said much of the surplus money the province has found in recent budgets was the result of record population growth.
That growth is set to level off in coming years, and if greater investments in public services and infrastructure aren't made, New Brunswickers will continue to suffer from limited access to health care and housing.
"We have massive investment needs in health care. We have massive investment needs in boosting the supply of housing, and these are things that allow us to help all New Brunswickers," said Saillant.
ABOUT THE AUTHOR
With files from Shift
David Amos
Desperate politicians say desperate things
David Amos
Methinks Mr Outhouse has lots to read tonight N'esy Pas?
David Amos
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Methinks Mr Outhouse has taken on quite a job N'esy Pas?
Doug kirby
Childish games now? Not sure who NB will elect but take a chance on someone else
Don Corey
Reply to Doug kirby
Why? For yet more liberal mismanagement?
David Amos
Reply to Doug kirby
I have to caution you This is no game It is an expensive circus that we have been financing since we began paying taxes
David Amos
Reply to Don Corey
Imagine if enough Independents got elected that they col control the mandate like the PANB did for awhile
Matt Steele
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This provincial tax reduction is a great first step , and when the current FEDERAL government is defeated in next year's mandatory election , and all the CARBON TAXES are eliminated under an incoming federal CPC government ; then we will see some major tax relief that Canadians nation wide so desperately need .
Ron parker
Reply to Matt Steele
dream big matt.
Michel Pelletier
Reply to Matt Steele
U like flood, bad weather, crippling storms, well everyone thinks paying high price is bad, cancel the CT and will be much higher
Eileen Kinley
Reply to Matt Steele
The fuel levy is rebated.
Matt Steele
Reply to Eileen Kinley
Not rebated at actual cost to the consumer .
Eileen Kinley
Reply to Matt Steele
Customers who reduce their emissions/have low emissions get back more than they pay. You're right.
David Amos
Reply to Michel Pelletier
Dream on
Raymond Leger
Trying to buy the election with your own money
Ron parker.
Reply to Raymond Leger
if he really wanted to help he would do it now.
Don Corey
Reply to Raymond Leger
Liberals love to take our money and spend….spend….spend…..
Ronald McCallum
Reply to Don Corey
"Liberals love to take our money and spend….spend….spend….."
However, Premier Higgs is a Progressive Conservative.
So, you don't want the Government of New Brunswick to provide services . . . services . . . services . . . . ?
MR Cain
Reply to Ron parker
if he really wanted to help he would leave
Don Corey
Reply to Ronald McCallum
Absolutely, but it should be like running a household or business, where we spend within our means. Who can forget Trudeau and Leblanc showing up here in NB and telling overwhelmed Gallant to keep on spending?
That mentality has more than doubled our national debt in 8 years, and for what? Well, for starters we have the bloated federal civil service, up more than 40% since 2015. Do you want more? It’s a long list that is burying this country.
David Amos
Reply to Raymond Leger
Amen
Ron parker
why wait, just do it now.
Marc LeBlanc
Reply to Ron parker
JACKPOT!
John Lee
Reply to Ron parker
Because politics.
David Amos
Reply to Ron parker
Good question
Matt Steele
Reply to Ron parker
The Legislature is not in session . Not much sense in implementing tax cuts this close to an election if the the Liberals plan on going on their traditional massive tax and spending spree if they happened to get elected .
Ron parker
Reply to Matt Steele
sounds like something you would say.
Marc LeBlanc
When I hear people catagorizing individual viewpoints as the "left" or the "right"or "far left" or "far right" it reminds me that we will never solve our problems by tribalizing our population.
This premier has done this in spades
John Lee
Reply to Marc LeBlanc
Many people amusingly conclude a statement like yours by promptly blaming whichever other political side isn't theirs. I'm glad you didn't go there, although it would have been funnier.
Sue Fillmore
Reply to Marc LeBlanc
So does the prime minister
John Lee
Reply to Sue Fillmore
Unfortunately, divisiveness between the left and right gets more votes. Nothing moves people like fear that "those other guys" might take office.
Marc LeBlanc
Reply to John Lee
The one other catagory my father use to say was " some people just want to see the whole world burn!"
Matt Steele
Reply to Marc LeBlanc
I think you may be confusing the provincial and federal governments as it is the FEDERAL government who has divided and hurt Canadians so badly via their many failed and poorly thought out policies .
MR Cain
Reply to John Lee
There is no defined "left" or "right", just a little of both.
Don Corey
Reply to Marc LeBlanc
No, the media can take most of the credit , along with the PM.
David Amos
Reply to John Lee
True
Ralph Wighham
I guess if your government isn't actually planning to invest in anything to improve the lot of the taxpayers, then they can give you back a few pennies. I'd rather they make an effort to actually provide the services that are part of their remit, like healthcare, but then I'm not a Tory.
David Amos
Reply to Ralph Wighham
Its more than a few pennies
Ronald Miller
The left will once try to spin tax breaks as a bad thing, just like they do surpluses. They are either very frustrated with a gov't that does much more good than bad or not very good at math.
Reply to Ronald Miller
Good at math? LOLOLOL...
That is why this government sent a team in Indonesia to recruit nurses.....That's way cheaper than trying to find a way to keep the ones that are already here from quitting....
Of course once we have the foreign nurses arrive here, there will be housing and a guarantee that they can be licensed to practice...
A bit like those emergency contract nurses.. those foreign nurses are going to be so cheap (sarcasm)..
And don't forget that depleting healthcare workers from other countries is also such a good idea....
Dan Lee
Reply to Ronald Miller
tax breaks where?.....property taxes? adjustor taxes? provincial taxes on gas?
John Lee
Reply to Dan Lee
I would guess he means the provincial sales tax. You know, the one the article is about?
Reply to Ronald Miller
What makes your spin on things any better?
Pandering to the masses. Nothing but a cheap election gimmick, do it now as we all could use the tax break. Higgs got to go, drop the writ go see the Lt. Governor time for a change,
Ronald Miller
Reply to Ted Gallant
He has given us many tax breaks, pay attention.
Ted Gallant
Reply to Ronald Miller
Maybe you want to read this from the Fraser Institute not what I would say is a left leaning group - you need to get your facts correct before you post your normal BS
https://www.fraserinstitute.org/article/new-brunswick-government-could-use-new-surplus-to-cut-taxes
David Amos
Reply to Ted Gallant
Oh my my
Ronald Miller
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More money in the pockets of taxpayers is ALWAYS a good thing unless you have blindly supported the left your entire life and think oppressive taxes is a good thing. Canadians understand how punishing that is under JT.
Koffi Babone
Reply to Ronald Miller
I hope you do realize that taxes are used to provide services like healthcare, education, road repairs etc..
Don Corey
Reply to Koffi Babone
Liberals love to tax and spend.
David Amos
Reply to Don Corey
Its just another one of those things they do that nobody seems to appreciate
Marc LeBlanc
Too little too late
Mr "I don't know why I bother"
Start with the 8 cents per litre refinery tax you dumped on the people of this province then screamed about the 3 cent carbon tax increase
Do you not see how incredibly obnoxious that is ?
Ronald Miller
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Reply to Marc LeBlanc
You mean federal tax JT dumped on all Canadians.
Ronald McCallum
Actually, the Prime Minister of Canada does NOT tax Canadians, it is the Parliament of Canada pursuant to the Constitution Act 1867, Part IV ---- Legislative Power, Sections 53, 54 & 55.
David Amos
Reply to Ronald McCallum
Are you sure about that?
Matt Steele
Certainly great news to see the Higgs PC government offering N.B.ers some much needed tax relief . Quite a difference in philosophy from the current FEDERAL Liberal government who seems intent on taxing Canadians into the stone age as so many families struggle to keep a roof over their heads , and food in their stomachs . It is a great first step by the Higgs PC government , but they really need to bring in some rent controls similar to what several other provinces have done as there are far to many people struggling with paying their rent , and the endless out of control rent increases . Failure to address the rent control issue may very well swing the upcoming provincial election one way or another .
Ron parker
Reply to Matt Steele
offering if elected, if he cared he would just do it with no strings attached.
David Amos
Reply to Matt Steele
Yea right
John Montgomery
So then he will have even less money for things. After telling us al these years that healthcare isn't getting better from lack of money. BRILLIANT.
Ronald Miller
Reply to John Montgomery
Better go back and do some reading. He has said consistently on many fronts that more money and spending does not solve problems. Health care worker shortages is health's biggest hurdle. If spending solved all problems then Canada would be the the best shape ever instead of worst. BRILLIANT.
Matt Steele
Reply to Ronald Miller
Truer words have never been spoken . Apparently some believe that there is a magical medical tree where Doctors and Nurses grow ; but in reality there are NO Doctors or Nurses to hire at any price . Plus the MASSIVE population surge implemented by the FEDERAL government over the past NINE years has overloaded and crushed the Canadian Health Care system .
Dan Lee
Reply to Matt Steele
seems they had no problem hiring nurses at 300 dollars an hour......you even got nurses going to usa.......
David Amos
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Reply to Matt Steele
Keep spinning right
David Amos
Content Deactivated
Reply to Dan Lee
Keep spinning left
John Montgomery
Reply to Ronald Miller
You pay people more and you get people. That's how the job market works.
Eugene Peabody
Reply to Ronald Miller
Well that statement does not apply to our health care and education problem as it stands today. If I have the roof leaking badly on my house and I save money by putting a tarp on it that does not cure the problem but if I spend a little more money and put a new steel roof on then it is fixed for many years.
Dan Lee
its worth the 2% just to get rid of you......................
David Amos
Reply to Dan Lee
Why?
Jos Allaire
Reply to Dan Lee
Why, he says...
David Amos
Reply to Jos Allaire
Well???