Mr. Minister of Finance, I realize that when your party won the election in September 2010, the previous Liberal government had left you with a deficit and a significant provincial debt. I am also aware that the consequences of the economic crisis of 2008, the slow recovery of the economy in the United States, our largest trading partner, and the high rate of the Canadian dollar have worsened the situation. I also realize that the decision made by the former Liberal government led by Shawn Graham to allow major reductions in taxation for individuals and corporations have put the public finances in the red. You, on the other hand, have not reversed this trend.
The nice colored chart that you proudly exhibit in your pre-budget consultations shows that the decisions made by the previous Liberal government favoured the richest and have cost the province more than 1,052 billion dollars. Other charts, just as colorful, explain that you reduced our provincial deficit through cuts in the public sector, increases in taxes and higher service charges. In spite of these measures, your economic forecast for the next year will still keep us in the red.
What I don’t understand is your insistence in not making the right economic decision to return to the 2008 tax rates for individuals and corporations. This would allow you to collect well over $ 325 million (same nice colored chart), almost all of the projected deficit for 2013-2014.
I do not understand that while you wish to convince us that you are managing the provincial finances in a fair and prudent way, you are still blind to the fact that most of revenues in provincial and federal budgets come from income tax paid by individuals and corporations.
I am certainly not teaching you anything in saying that the income tax is the best egalitarian measure to ensure a fair contribution from citizens to the public treasury.
I do not understand your obsessive fixation of always suggesting the same menu of regressive taxes as the ones you are still proposing this year, i.e. a 2% increase of the HST, a tax increase on gasoline and tobacco, a highway toll on the snake-like road between Edmundston and Nova Scotia. Even worse is your latest proposal; the health tax, a newcomer on the scene tax, like a rabbit that you would have just pulled out of your hat at a children’s party. Your economic rationale is indeed hard to follow.
What I find the hardest to understand is the psychological or ideological barrier that prevents you from turning towards a simple, expeditious and economically sound way of resolving the financial problems, i.e. going back to the 2008 tax rates. You could also be a bit more bold by adding a fifth tax level, a rate of 21% for the more affluent who have an income of over $ 150,000. Now, that would be something! This would allow you, next year, during your last tour of pre-budget consultations, to proudly display a brand new chart, all in blue this time, without any red. A nice touch before going to the polls rather than facing an angry electorate.
For two years, you have taken millions of dollars from us by imposing regressive taxes. This type of regressive taxes have a more profound impact on individuals and families living on low or fixed-income. Your current proposals, if implemented, would continue to penalize them. Please go get the money where it is and leave us in peace before we see nothing but red.