Ignite Fredericton Concerned Over Corporate Tax Increase
FREDERICTON – One of Fredericton’s economic development groups is concerned New Brunswick has lost its competitive edge.
As part of the 2016 provincial budget announced Tuesday, the provincial government will increase the general corporate income tax from 12 to 14 per cent. That will give New Brunswick one of the highest corporate tax rates in Canada, equaling Newfoundland and Labrador and lower than only Nova Scotia and PEI.
Ignite Fredericton CEO Larry Shaw says the increase hurts New Brunswick’s competitive advantage.
“We commend the government’s efforts to reduce expenditures and create a sustainable fiscal plan for the province’s future. We understand that this is a difficult situation, but we still assert that we need to retain our competitive advantage however we can,” Shaw said.
“The increase in corporate tax will make it more difficult to attract companies to our region… and having a competitive tax rate historically played in our favour when attracting investment from within Canada and the global economy to consider New Brunswick for its competitive business case. It’s difficult to say where we will now stand.”
New Brunswick currently holds some of the highest personal income tax rates in the country. Shaw said this is a disadvantage when trying to attract high earning executives and skilled talent to relocate. However, he says the organization remains optimistic about the future.
“Although we are disappointed in the increase to HST and corporate income tax, we remain optimistic that the Education and New Economy Fund announced at State of the Province will be strategically distributed to grow our workforce, create New Brunswick grown talent and support innovative initiatives such as coding in the school curriculum. Becoming the Smart Province is the direction we need to be moving in,” Shaw said.