New Brunswick Needs An Attitude Adjustment
Bob Manning is a New Brunswick entrepreneur and business owner. He is past Chair of Enterprise Saint John and the Saint John Chamber of Commerce and is a former Board Member of the Canada Revenue Agency.
Why are so many New Brunswickers afraid of success?
It’s a provocative question but you might think it was true if you read the “comments” section on media outlets or posts on social media in the province. There is a clear and persistent suspicion about the motives of business people, a general distrust of anyone who tries to run a business.
“You’re just trying to make a profit!” is levelled as an accusation, as though a businessperson making a profit was inherently wrong or maybe evil.
It’s not all New Brunswickers, of course, but it is a sizable number. And they influence policy decisions. When people are suspicious of business and those who make their living from it, that makes it easier for governments who know there will be no backlash if they add new fees, impose needless regulations and raise taxes.
And raising taxes is something New Brunswick does particularly well.
Today, New Brunswick is one of the highest taxed provinces in Canada. Our top marginal tax rate is 53 per cent. That penalizes success.
According to Statistics Canada, New Brunswick’s median income is the lowest in Canada. The average household takes in just over $59,000 per year compared to over $74,000 in Ontario and $93,000 in Alberta and nearly $70,000 in British Columbia.
And despite our high taxes, our public finances are still a mess. The provincial debt will reach $14.4 billion next month and for 2018-2019 the province will spend $675 million just paying the interest on that debt. That’s more than they will spend on departments like economic development, post-secondary education, training and labour, tourism, environment, agriculture and aquaculture, and energy and resource development. What else could our government do for the citizens of this province if they weren’t spending $675 million on interest on the debt each year? It would mean better services and lower taxes.
It should be clear by now that high taxes and low incomes are a recipe for failure, not success. The reality is we need more profits in New Brunswick. Much more, in fact.
Profit is the fuel of our economy and in New Brunswick our tank is almost empty. When a business has a profit, it can hire more people and raise salaries. It creates a cycle of opportunity. Profit isn’t a dirty word. Profit drives growth, and growth creates jobs. New Brunswick will be stronger when more people recognize this.
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But in New Brunswick, businesses are dying a death from a thousand cuts. Higher income taxes, higher property taxes, higher workers’ compensation costs, higher employer costs for CPP – the list goes on and on with governments repeatedly saying, “Just a little more.” Then add to the mix the resentment of business owners in many quarters of the province.
Most people who own a business in New Brunswick aren’t millionaires or billionaires. Yes, we have a few families in New Brunswick that have seen outsized success, but I am talking about the electrician with four employees, the metal fabricator with a small shop and ten employees, the dentist who launched her own practice or even a humble sandwich maker.
With the high taxes, red tape and negative attitudes, some are asking “Why bother?” Some business owners will give up. Why work 80 hours a week to take home less than you would make as a civil servant with a nice pension? Why take the risk? Why struggle through the paperwork government demands? It’s a fair question in a place like New Brunswick.
Others will persevere, taking in a bit less each year and scaling back their ambitions and operations as a result.
We see the impact of this bad attitude and bad policy in our economy today. It’s why our incomes are low and why our public finances are a disaster. With the looming demographic crisis as our population ages, things will get much, much worse.
People and investment dollars have never been more mobile. New Brunswick doesn’t have a claim on people from here. If they can do better somewhere else, many will leave. This is the opportunity cost of our attitudes toward business and our high taxes. We won’t know exactly what we’ve lost but we will certainly feel the pain over the long term.
New Brunswick needs an attitude adjustment. We should stop being hypercritical and questioning the motives of businesspeople. Instead we should celebrate them. Governments should stop penalizing success by constantly demanding more in fees or taxes.
We need a vibrant, profitable business community in this province. Not every New Brunswicker can work for government. Someone has to pick up the tab.
Bob Manning is a New Brunswick entrepreneur and business owner raising his family in Saint John. He is past Chair of Enterprise Saint John and the Saint John Chamber of Commerce and is a former Board Member of the Canada Revenue Agency. He writes an occasional column for Huddle addressing important business issues.
Huddle publishes commentaries from groups and individuals on important business issues facing the Maritimes. These commentaries do not necessarily reflect the opinion of Huddle. To submit a commentary for consideration, contact editor Mark Leger: [email protected].