N.S. Leadership Candidates Propose Tax Breaks For Hospitality Businesses
HALIFAX – Two candidates in the Nova Scotia Liberal Leadership race have outlined their plans to give small businesses a tax break, should they become the next Premier of the province.
Randy Delorey, a former finance minister, wants to give small businesses in the food and hospitality sectors a tax holiday in 2021, since those industries have been the hardest hit during the pandemic.
“The Tax holiday is targeted towards small businesses in the food services and hospitality industry,” said Delorey in an interview with Huddle Today. “Those are sectors that are disproportionately impacted by the Covid-19 pandemic that’s ongoing.”
“I believe this will be a means to help support them with the cash flow challenges that come with the slow operating season.”
It has, indeed, been a historically difficult time for these industries. Restaurants Canada, for example, reported that the food services industry saw a $400-million decline in revenue in 2020. It will take at least two more years before there is a full recovery.
Under Delorey’s plan, provincial taxes for these small businesses would be completely waived for one year. The former finance minister estimates it will cost the province between $2-million – $3-million in revenue to give such a holiday.
“For these businesses that may be on the cusp of viability, taxes do represent a fiscal expense for them. This holiday for the tax season may be enough to ensure that that operator continues to operate for the season.”
In a written statement to Huddle Today, leadership candidate Labi Kousoulis said he wants to implement a small business tax rebate of $50-million among other measures.
“Within my policies, I have outlined my tax relief strategies and incentives for business now, and post Covid-19,” wrote Kousoulis.
“I have committed to a $50-million tax rebate for small businesses across Nova Scotia. In addition to this, I have announced that I will be extending the tourism tax rebate for the next year. I was also happy to announce that that I would be issuing a 10 percent payroll rebate over and above the 75 percent small business rebate issued by the federal government.”
Huddle Today made numerous attempts to reach leadership candidate Iain Rankin, but did not receive a response by publication.
Of course, none of these measures are free. Any type of tax breaks for businesses means there are fewer public dollars at a time when government is struggling financially as well. Nova Scotia is forecasting a $778.8-million deficit for 2020-21. But Delorey says the food and hospitality sector plays an important role in the economy, and it’s vital for these businesses to survive.
“It is a lesser tax base, but we have to keep in mind, first and foremostly, it is a targeted reduction in a very specific sector…” Said Delorey.
“With reduced business, they have reduced revenue, so they need supports that will help them with their cash flow, so they’ll have the cash to pay their bills and pay their employees. So, this is one way to target a sector that has been disproportionately negatively impacted; a sector that’s really important to be there for us, as our tourism and economy rebounds from this pandemic.”