As expected, the 2011-2012 budget takes a spending cut approach and sees one of the most significant cuts in overall government spending for next year - close to our recommendation of a spending freeze. Although we recommended a balanced budget by 2013, this budget will see New Brunswick return to a balanced budget in 2014.
Highlights:
No HST increase
Small business corporate income tax lowered to 4.5% on January 1, 2012 (promised to be 2.5% over this government's term)
General corporate income tax going down to 10% in July 2011, as previously announced, but not going lower
Personal income tax rates to stay at 2011 levels (no decrease as previously announced for 2012)
Personal income tax for highest bracket only to revert back to 2010 level (slight increase)
Minimum wage to be reviewed, particularly as it relates to new hires and the food service industry
Gas tax up 2.9 cents/litre and diesel up 2.3 cents/litre
Tobacco tax increased by 5.25 cents per cigarette
The deficit for 2011/2012 is significantly lower than that of the current year (by nearly 50%)
Budget reaction
NB budget delivers significant spending cuts for 2012
We were disappointed that there was nothing formal announced to reduce Red Tape, though government does acknowledge its importance and plans to do more going forward.
In regards to public sector pensions, a review has been promised before any concrete changes are announced.
We give this budget a grade of B- in recognition of how difficult it has been to turn the taps off from heavy spending increases over the last four years. This government has only been in power for five months, so we will be watching them closely at next year's budget to ensure that they follow through on these early commitments to live within our means.
For more information please contact us at 1-888-234-2232 or msnb@cfib.ca
Join CFIB today. When you do, your business gains the clout, impact and scale that come with being part of the largest small business organization in Canada. There is strength in numbers, and we make your views count. Don't just hope for a better future for your firm, take direct action to protect your business investment by becoming a member of CFIB.
