Nova Scotia NDP Pledge To Increase Corporate Tax Rate, Strengthen Rent Control
HALIFAX — The Nova Scotia NDP believe a two per cent corporate tax cut, handed out by the McNeil Liberals in 2020, had little benefit to the average Nova Scotian. If chosen to form government, the NDP is promising to bring the province’s corporate tax rate from 14 percent back up to 16.
When the tax cuts were announced in February 2020, then-Premier Stephen McNeil framed it as an economic investment. He also announced the small business tax would be reduced from 3 percent to 2.5 percent. The cuts officially took effect in April 2020.
“That is an investment in you,” McNeil announced at a Halifax Chamber of Commerce event at the time “And quite frankly I hope it’s an investment you turn around and reinvest in Nova Scotians.”
But Nova Scotia NDP leader Gary Burrill says there is little evidence that the $70 million in corporate tax cuts created more jobs in the province. He notes that the cuts had “no strings attached,” so there was no pressure for corporations to reinvest the money.
“If corporations treat it as a windfall, they’re not in violation of anything to do with the way that the tax break was set up,” said Burrill.
“So, to argue that the change from 16 per cent to 14 per cent we’re going to have investment in job creation, I think it flies in the face of the evidence.”
Burrill also said the province needs as much revenue as possible coming out of the pandemic. Nova Scotia is facing a need to invest more money into areas like long term care, mental health, and childcare, among others.
“Never has there been a time since probably the second world war when government’s need for revenue to uphold the economy has been any greater,” said Burrill.
The Halifax Chamber of Commerce, however, believes that the region needs to have a competitive tax rate to attract businesses. Kent Roberts, the chamber’s vice president, says he disagrees with the idea of raising corporate taxes.
“If we’re going to attract business here and keep business, we have to be competitive,” said Roberts. “And that rollback from the Liberal government was just a small step in that in the right direction. So, we would be totally against any change to that previously implemented policy for sure.
According to Burrill, the NDP plan to keep the small business tax at 2.5 per cent.
The NDP also announced this week that, if chosen to form government, they would take steps to strengthen rent control in the province. The first step, says Burrill, is to turn rent control from a temporary tool, made by the Liberals through the Emergency Measures Act, into a permanent one.
The NDP tabled The Rental Fairness and Affordability Act in 2018, where they called for rent to be limited by the Consumer Price Index. Under the act, however, landlords would be able to apply for exemptions if they can show they made investment into upgrades and upkeep of their buildings.
“Landlords are eligible in the situation of exceptional expense or investment to apply for exemptions to the cap,” explains Burrill.
“So, it’s not a nonnegotiable across-the-board matter.”
Burrill also doesn’t buy into the argument that rent control deters developers from constructing new buildings and increasing the vacancy rate. He says a lot of huge cities across Canada have rent control and it hasn’t prevented new development.
“They have rent control in Toronto. They have rent control in Vancouver; they have it in Winnipeg and Montreal. In none of these places has anyone had any experience of development being hindered by rent control,” he said.
“So, I think this is a bogus line of reasoning…. rent control is not a novel idea. A majority of Canadians today live in jurisdictions that have rent control.”