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Ten Reasons You Should Care About the NB Budget

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We understand that as an entrepreneur, you have better things to do than to read hundreds of pages of budget documents outlining how government will spend your tax dollars. But fear not, CFIB is here to break down what the 2016-2017 provincial budget means for your business and for the future of our province.

Over the last year, the government consulted with groups and taxpayers, and repeated many times that everything was on the table – including hospital and school closures, highway tolls and an HST increase. Our message to the government has been extremely clear: we believe that the Province has a spending problem, not a revenue problem.

Thanks to your continued support and the 1,200 Action Alerts we delivered to the Premier in December, we scored some major victories for your business, but this budget shows that there is still plenty of work to be done to get government to understand the realities of running a business in New Brunswick.

Top Ten Reasons You Should Care

1. HST hike

As of July 1st; New Brunswick will be tied with Nova Scotia for the highest sales tax in the country, at 15%.                         

2. Small Business Corporate Tax Rate (SBTR) drop

While it was not specified in the budget, CFIB has been assured by both the Premier and Finance minister that a second reduction of the SBTR will be announced shortly. The rate will drop from 4.0 % to 3.5 % on your business’s first $500,000 of income.

3. General Corporate Tax Rate hike

For all income not eligible to lower rates, the General Corporate Tax Rate applies. On April 1st, this rate will be increased from 12 % to 14 %, making it one of the highest in the country.

4. Real Property Tax hike

This tax is a one-time payment on the purchase of a property when the deed is registered. Effective April 1, it will increase from 0.5 % to 1 %.

5. Reducing the cost of government

The public service will be reduced by 1,300 positions over the next five years.

6. Increasing government efficiency

Government call centers will be reduced from 40 to 4, and low-volume tourist centers will be closed.

7. Promoting privatization

 

The government will undertake the analysis to quantify the economic value of Larry’s Gulch fishing camp and to identify qualified private sector operators, leading to a private sector proponent operating the camp by 2017-2018. The Province will also issue a formal Request for Proposals for the operation of the Mactaquac Provincial Park Golf Course with the intent to implement for 2017-2018. The government will also establish an Alternative Service Delivery (ASD) to ensure strategic, evidence-based and standardized approach is applied when reviewing services that could be delivered by government versus those better delivered by another party.

8. Bringing fairness to public sector benefits

The government will implement new initiatives to reduce use of sick and compensation leaves and carryover of vacation benefits.

9. Holding the line on health and education.

The government has opted for the status quo in health and education, by not making significant changes in the departments that take the biggest share of the provincial budget.  

10. Backtracking on taxing the highest earners

The government is eliminating the provincial income tax rate of 25.75 % it created last year for those who earn more than $250,000. The bracket on incomes greater than $150,000 decrease from 21 % to 20.3 %.

A Few Numbers to Keep in Mind

$9 billion: the government’s total spending plan for the coming year                         

$347 million: the forecasted deficit for the coming year

2020: the year the current government expects New Brunswick will (finally) have a balanced budget

$13.5 billion: New Brunswick’s net debt by end of fiscal year (or $17,880 for every New Brunswicker)

As the New Brunswick government now moves to the preparation and implementation of its new “Growth Plan”, CFIB will continue to make your voice heard, ensuring that politicians and bureaucrats understand that the only way to grow our economy and to create jobs is to foster a more small-business friendly New Brunswick.

Have questions or comments? Contact us at [email protected] or by calling 1 888 234-2232.