In the May 2019 provincial general election, Newfoundlanders and Labradorians chose a minority government led by the Liberal Party of Newfoundland and Labrador. But what does this mean for small business?
The 2019 budget eliminates the Retail Sales Tax on automobile insurance premiums. While this will save your business $1,300 on a $10,000 insurance policy, CFIB thinks it should go further. We continue to advocate for the elimination of the Retail Sales Tax on all insurance premiums, a potential savings of thousands of dollars for your business.
Deficit and debt
Despite the federal Hibernia money, the government still has a deficit and it is projected to grow next year. The government plans to get to balanced budget by 2022-23. However, if spending is not reduced and oil royalties are not as high as anticipated, taxes and fees will have to increase for government to meet their target. Maintaining deficits and capital spending contributes to an increasing debt. The cost to pay for the debt is forecasted to be $1.4 billion, which is equal to the revenue government thinks it will get from personal income tax. As we noted in our pre-budget submission, the government recognizes that Newfoundlanders and Labradorians are unable to handle any more tax and fee increases; and whilst this acknowledgement is welcome, it’s not enough to ease fears.
The Muskrat Falls development project is due to be completed by 2021, and electricity rates are expected to double without some sort of mitigation. The current rate mitigation plans are likely to do very little to keep rates from skyrocketing. There is too much uncertainty regarding the options and the mitigation plans do not address the growing costs after 2021.
$15/hour minimum wage
In 2018, the government amended the legislation on minimum wage, linking increases to the National Consumer Price Index. Nevertheless, the legislation does not remove the possibility that the minimum wage could be increased by a higher rate during a bi-annual review. The Liberal minority government requires the support of one other political party (or the independents) to implement a $15 an hour minimum wage. However, it’s important to note that CFIB did receive assurance from the Honourable Bernard Davis, Minister of Advanced Education, Skills and Labour, that the government would undertake a review before making any decision.
CFIB will continue to strongly advocate on your behalf. We take all our direction from our members; we never give up, and we never go away.