Proposed Tax Reform Will Harm New Brunswickers - 2008-06-24

Fredericton: The New Brunswick Federation of Labour along with many Unions and Social Groups is calling on the Liberal Government to conduct proper consultations about the proposed tax reform.

“A summer consultation over such an important issue is totally unacceptable”, said the president of the NBFL, Michel Boudreau. “Only well organised groups will be able to attend those consultations on such a short period of time. This process will leave out the persons who will be the most affected by the proposed changes - low income workers, the poor, the seniors and the women.”

“The regressive reform contains many flaws and will cause unjust harm to all workers in this province”, said Boudreau.

“We are very fearful that the proposals for a flat income tax rate of 10%, the increase in the Harmonized Sales Tax, the introduction of a carbon tax and changes to the Provincial Real Property Tax will have two major results.

First, it is a shift from a progressive tax system where individuals are taxed based on their income to a regressive tax system where individuals are taxed on items of consumption”, explained Boudreau

“This year alone, the province lost over $15 million in revenues by phasing out the large corporation tax, revenues that we need to finance our public health system, our schools and other public services.”

This government wants to further reduce its source of revenues by going to a flat personal income tax of 10% like Alberta. New Brunswick is not Alberta where the province will be getting $11.7 billion in non-renewable resources revenue mainly from oil. New Brunswick doesn’t have that source of revenue.



“The proposed changes to the HST will shift the burden to the lower income earners in our society”, added Boudreau. There are things that everybody has to buy: food, cars, houses, electricity, phone. When you increase the tax level of the HST, it means that lower income earners will be more negatively affected than high income earners.

As far as the proposed carbon tax, it seems that tax is little more than a Robin Hood tax grab in reverse: it would take money from low and middle income New Brunswickers to fund income tax cuts that will primarily benefit big businesses and affluent families.

“It is estimated that the total direct and indirect costs from a $30/ton carbon tax would add up to extra costs of $663 per year for an average New Brunswick household. This is equivalent to 1.2% of average annual income. How can New Brunswick fund more environmental infrastructure and green jobs investments with lower revenues and less fiscal capacity?”

“The proposed tax reform will worsen the inequality and raise the level of poverty in the province”, concluded Boudreau.

For more information:

Michel Boudreau

President NBFL

381-8969