2008 New Brunswick budget
April 10, 2008
Hon. Victor Boudreau
Minister of Finance
P. O. Box 6000
Fredericton NB E3B 5H1
Dear Minister:
On behalf of the 4,500 small- and medium-sized business owners represented by the Canadian
Federation of Independent Business (CFIB) in New Brunswick, I write to provide you with feedback
on the 2008/2009 provincial budget.
Small businesses had hoped to see progress in three areas from this budget: tax relief, fiscal
responsibility and regulatory reform. As you know, tax relief is by far the greatest priority of CFIB
members as they continually point to the tax burden as a barrier to growth. Last year’s budget –
which saw increases in personal income tax, the small business tax rate and a decrease in the small
business threshold – left families and businesses with less. In fact, only one in 20 business owners
considered last year’s strategy to be an appropriate strategy for economic growth. For these
reasons, business owners looked to this year’s budget for good news, with almost two-thirds
hoping for tax cuts, one-fifth for debt repayment.
On the tax front, the ongoing commitment to eliminate the Large Corporation Capital Tax at the
end of this year is a positive first step in reducing the tax burden. That said, much more needs to
be done to promote small business creation and growth. Therefore, CFIB strongly encourages you
to set the goal of the upcoming tax review as reducing the overall tax burden on entrepreneurs.
Lower taxes have proven to motivate business owners to invest more in technology and equipment,
to increase wages, hire more staff, and enhance training for employees. Such investments are
rewarded by higher productivity for the business owner and increased economic activity for the
province.
To ensure that the small business perspective is reflected in the upcoming tax review, CFIB will be
bringing their point of view to the table. We are planning to survey all 4,500 small and mid-sized
businesses members of CFIB to gather all input necessary to respond to your Green Paper. CFIB
would be pleased to work with your team and develop any survey questions related to building a
competitive tax environment. By working together, government will be in a position to hear directly
from entrepreneurs that form the backbone of New Brunswick’s communities and its economy.
Given these businesses operate in all corners of the province and in all sectors, we hope you will
agree that their input is critical.
Further to the budget, CFIB members were pleased to see that it was balanced, with a modest
increase in spending. However, they are worried about the continued increase in the overall debt.
Increased provincial debt means higher taxes for longer as all taxpayers will be tasked with paying
interest charges, along with the principle. As you know, CFIB supports a responsible approach to
spending and a commitment to a truly balanced budget that would see New Brunswick’s overall
debt decline – rather than increase. We would welcome any legislative action that would enshrine
these principles in law to assure all generations that government takes fiscal responsibility
seriously.
CFIB has long believed that New Brunswick has a solid track record on cutting red tape. As we
discussed with you during the budget lock-up, while New Brunswick has kept the burden of red
tape top-of-mind, it can only go so far without quantifying how much red tape there is. This is an
approach which we see in other jurisdictions across the country, including in Nova Scotia and
Newfoundland and Labrador, which have introduced processes to ‘measure’ red tape, set annual
targets for reduction, and publicly report on their progress. We do believe that the tax review
provides a tremendous opportunity to measure the overall regulatory burden on businesses, as
taxation and regulation are two integral components of business climate.
Another integral component to a competitive business climate is ensuring the labour force
continues to meet the needs of the business community. For this reason, CFIB members were
pleased to see investments in education and skills development, as the shortage of labour is an
ongoing problem. Small business owners appreciate the additional commitment to strengthen
immigration to the province and help newcomers with language training and settlement services.
In summary, CFIB members had high expectations of this year’s budget that only partially
materialized. They were pleased to see a balanced budget, with a moderate increase in spending
and investments in education and skills development. They were, however, disappointed by the
lack of tax or regulatory relief, and by the continued increase in the net debt. I have attached CFIB’s
Budget Report Card so you can see how CFIB graded the budget in various areas of our members’
priorities.
Finally, I would like to take this opportunity to thank you for having the budget lock-up. It
demonstrates transparency and good communication between government and associations.
Building on this, I would like to ask that your government return to the traditional pre-budget
consultation process rather than a series of speeches or group meetings. The person-to-person
presentation process is best for meaningful two-way communication and lays a solid foundation
for government to be open and flexible.
Sincerely,
Andreea Bourgeois
Director, Provincial Affairs
cc: Mr. John Mallory, Deputy Minister of Finance
