In a recent Mandate question asking if the government should give priority to deficit reduction or tax relief,the majority of you chose deficit reduction and that was the focus of the Canadian Federation of Independent Business’ 2020 pre-budget submission.
The Minister of Finance said taxes would not be going up in Budget 2020, so CFIB highlighted a number of initiatives to reduce government spending without harming core public services:
- Health care – Ways have been identified to save upwards of $600 million in health care while maintaining services and improving health outcomes.
- Public procurement – The provincial government can find efficiencies through effective procurement and ensure additional revenues if local companies are able to compete in the process.
- Oil equity – the provincial government’s focus should be on royalty revenue rather than holding equity in oil development projects.
- Tuition fees – Raising tuition can help the provincial government more sustainably reduce its contribution to Memorial University.
- Industry support – reducing industry support is unlikely to harm the provincial economy; government should not pick winners and losers.
- Government attrition – Attrition of the public sector does not appear to be working effectively, but implemented properly, it can contribute to lower spending.
The government’s debt is crowding out funding available for vital public services. With the fall in Brent crude oil prices, the provincial government will borrow to fill the revenue gap; increasing debt servicing payments. There is growing speculation of a provincial general election this spring and the provincial government is preparing for this with a bill to permit spending beyond the end of the fiscal year.
CFIB has asked for a budget or fiscal update in April. We believe Newfoundlanders and Labradorians, including small business owners, should know the fiscal state of the province in advance of any general election.
The state of the provincial economy is always a hot topic, and the fiscal outlook in Newfoundland and Labrador is less than rosy. The government has a spending problem but seems reluctant to do much about it. There are a number of areas within government where it can become more efficient and generate savings for taxpayers.
As budget day approaches, CFIB has made a submission to the government outlining recommendations to make sure that their policies build small business confidence and strengthen your performance, without leaving a huge tax bill behind.
- Implement substantial spending reductions;
- Eliminate the RST on insurance premiums;
- Do not implement the new federal rules on passive investment; and
- Publish an annual report on the benefits derived and the costs incurred from any “investments” made through business financing programs.
If you want to learn more about our recommendations, please read the full pre-budget submission.
March 27 was budget day in Newfoundland and Labrador, but unfortunately there was very little for business owners to be happy about. The budget failed to alleviate some of the growing costs of doing business in the province.
The state of the provincial economy is a hot topic these days, and no-one can deny that our fiscal outlook is less than promising. The government has admitted to a spending problem, but seems unwilling to rectify it. The government’s fiscal plan is light on details, particularly on spending reductions, so it is distinctly possible the government’s targets may not be met. The fiscal plan does nothing to address the costs associated with Muskrat Falls rate mitigation efforts and still relies on oil revenues for growth.
While the tax reduction measures identified in the Budget – such as increasing the HAPSET threshold, and reducing the amount of retail sales tax on auto insurance - could be considered a positive step for small business owners, the overall effect will be minimal. There were also no details on what a new carbon pricing plan would look like; CFIB eagerly awaits the plan’s release later this year. There is concern the government has not adopted any credible fiscal plan to balance the budget. The debt continues to increase and debt servicing costs will now be almost half the cost to deliver health care.
In our pre-budget submission we outlined to government ways their policies could build small business confidence and strengthen your performance, without leaving a huge tax bill behind:
- Release an updated fiscal plan that credibly identifies the path to reaching fiscal balance
- Eliminate the Retail Sales Tax on insurance premiums immediately; do not increase any taxes or fees
- Eliminate provincial training and business development programs; replace the non-LMDFA funded training programs with a training tax credit.
- Find efficiencies in the health care system
- Introduce a legislative and regulatory framework to govern public-private partnerships (P3) in a transparent and accountable manner.
- Release independently verified data on the size of the public sector (i.e. departments, agencies, boards and commissions) on a quarterly basis.
On April 12, 2018, CFIB wrote to Finance Minister Tom Osbourne to outline our concerns with the provincial budget. We highlighted government’s unwillingness to accept they have a spending problem and the lack of attention given to the province’s fiscal situation. You can read the letter in full here.
We will continue to advocate for reduced spending and a more robust fiscal plan, all while encouraging government to look through the small business lens. CFIB will not give up, and we will not go away. If you’d like to add your voice, please sign our Action Alert Small business has had enough…No MORE EXCUSES!