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New Brunswick gets economic stimulus right
by Scott Gilbreath ~ March 26th, 2009
Instead of spending oodles of money it doesn’t have, the province of New Brunswick is stimulating the economy by simplifying personal income taxes and cutting corporate taxes. The government hopes that will make N.B. a more attractive place to live and to do business.
The Frontier Centre for Public Policy says the province has “a smart way to stimulate the economy”.
Between now and 2012, the province will eliminate the four-bracket personal tax system in favour of a two-rate system with lower rates. The province, in its backgrounder, properly brags this will make that province the one with the fewest tax brackets in the country after Alberta. New Brunswick explicitly defends the reduction and simplification with the aim of allowing people to keep more money. It also wants to improve that province’s ability to attract better-paying jobs and highly skilled labour. Memo to Premier Graham and his caucus: You’re correct on the method, justifications and goal.
On the business side, New Brunswick will drop the corporate rate to eight per cent in 2012 compared to 13 per cent now. “New Brunswick’s goal is simple,” says the Finance Department’s circular on the tax changes: “to have a globally competitive tax system that lays the foundation for the province to experience economic growth and create more jobs, moving the province toward its goal of self-sufficiency.”
Handing out public money to financially troubled companies, as the governments of Canada and the United States are doing, creates uncertainty in the business sector and discourages investment. New Brunswick’s approach, by contrast, provides incentives for investment and employment.
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