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.