‘Budget with a Heart:’ supporting essential public services with fair corporate taxation

In his recent consultations in 14 communities, Green Party leader David Coon found that New Brunswickers are interested to share their ideas about the provincial budget. In particular, community members support increasing corporate revenues to pay for better health and social services. Coon will likely raise this issue in the legislature after the Higgs government tables its budget tommorow.

Coon’s ‘Budget with a Heart’ tour in February visited Saint John, St. Stephen, Fredericton, Woodstock, Perth-Andover, Grand Falls, Edmundston, Campbellton, Dalhousie, Bathurst, Shippagan, Miramichi, Shediac, and Moncton.

The community discussions focused both on revenues – the funds coming in to the public purse, and on expenses – the best ways to spend the public funds.

On the revenue side, many community residents said that large corporations in New Brunswick are not paying their fair share of taxes. This includes both income tax on the profits that corporations make, and property tax on the buildings that corporations own.

The consultation tour report points out that harmonizing New Brunswick’s corporate income tax (14%) with Nova Scotia’s (15.25%) would generate $36 million in additional revenue every year. The Higgs government could raise the corporate tax rate in New Brunswick to match the rate in Nova Scotia. If the government does that, $19 million of the extra revenue would allow the Social Development department to increase social assistance rates, with $17 million left over to improve health services and other social programs.

As for property taxes, New Brunswickers believe that the corporations are not paying their fair share. Their views are backed up by the 2017 Fair Property Taxation report prepared by the City of Saint John that revealed, for example, that the local regional hospital pays more property tax than the Irving Oil refinery.

The NB Media Co-op recently reported that this unfair tax situation in the City of Saint John is having a wider social and economic impact across the province. Because they are not bringing in enough revenue, Saint John and other cities are claiming to not have the funds required to pay their municipal workers fair wages. This situation is contributing to labour unrest, including a recent strike and lockout of City of Fredericton outside workers, and currently, a lockout at a regional solid waste landfill site in Allardville south of Bathurst.

Also related to revenue, David’s Coon’s consultations found that community residents across the province are concerned that large corporations in New Brunswick are using tax havens to avoid paying taxes on their profits. Tax havens are countries with low or no income tax on corporate profits. Companies operating in New Brunswick but registered in country that is a tax haven pay no or few taxes to New Brunswick on the profits they make in the province.

Tax havens deserve more public attention. The NB Media Co-op recently published an interview with Alain Deneault, an expert on tax havens who lives in northern New Brunswick. Deneault has analyzed how the Irving family of more than 200 companies – in fields as diverse as oil refining, mining, timber, transportation, the food industry, restaurants and media – are “administered in a very opaque way, especially from the tax haven of Bermuda.”

Revenues coming in to the public purse from forestry corporations was raised in nearly all the communities. Coon heard from people upset that royalties are too low for the timber harvested on Crown lands by forest companies that hold Crown land licenses. If the New Brunswick government raised the royalties that forestry corporations pay, it would generate significant revenues to provincial coffers.

The consultation tour report states that community members frequently brought up the unhealthy influence that the Irving family has on government “through their business practices, by virtue of the significant percentage of the provincial economy they control and their persistent lobbying.”

Many of the community discussions on how to spend public money focused on supporting people living in poverty. Coon heard that community members want to see a provincial budget that supports people and families living in poverty. Many communities on the tour proposed that New Brunswick adopt a Basic Income Guarantee. This system, supported by the federal government, would provide everyone with the income required for shelter, food and personal expenses.

A legislative committee in PEI currently studying the feasibility of a Basic Income Guarantee in that province will be tabling a report to the PEI legislature this summer. The NB Media Co-op published an article last year imagining the potential impact of a basic income guarantee in New Brunswick.

The Green Party’s ‘Budget with a Heart’ tour report contains many more suggestions for how increased revenues could be spent in the province, including affordable housing, improved access to mental health care services and general health care services, and improvements in education and governance structures.

People in communities across the province also want to see the provincial government make more investments in climate action strategies such as energy efficiency of homes and other buildings, more renewable energy, electric vehicles and public transit.

Another message heard loudly on the tour was the need for more autonomy for rural communities. The tour report states that many people living in rural communities believe that decisions that work in Fredericton are imposed on them without understanding the local needs. One participant is quoted as saying: “Communities are no longer empowered, they sucked the life out of them when they moved all the decision-making to Fredericton.”

The recent attempt by the Higgs government to close night-time emergency services in six rural hospitals was raised during the community consultations. Decisions about local school programs and other education services are now being made in Fredericton instead of in the communities.

The ‘Budget with a heart’ tour report is available on the Green Party caucus website. The vote in the Legislature on the PC budget is expected to take place on March 20.

Susan O’Donnell is a member of the NB Media Co-op editorial board.