Progressive taxation in Newfoundland and Labrador

As Bill Hynd suggested in a July 13th blog posting on climate change and our province’s investments, working on climate change and making a serious commitment to tackling this large problem requires dedicated effort and resources.  Our collective efforts to reduce our gas consumption challenges us all. 

Resources, especially economic ones, may be hard to come by as well.  Much of Newfoundland and Labrador’s investment in oil and gas development is aimed at increasing revenue to the province.  The province needs revenue as well as expenditures to provide leadership on climate change, to develop different approaches to generating power (other than Muskrat Falls!) for example.

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But revenue will remain low if the province continues to employ a regressive system of taxation that privileges some of us, does not reduce the tax burden on lower incomes, and continues to generate low revenues.  Newfoundland & Labrador has the fewest tax brackets – 3 – and some of the lowest tax rates on high earners in Canada .  And in those 3 brackets, the tax breaks go disproportionately to those who earn the most, and hardly reduce the taxes paid by those with lower incomes in the same bracket.  For example, 3% reduction in taxes if you earn $100,000.00 nets you more than that same 3% reduction on $30,000.00 in earnings. 

The provincial government brags that we have the lowest taxes in Atlantic Canada.  Since 2007, tax cuts in Newfoundland & Labrador add up to $2,288,300,000.00 in lost revenue.  The tax cuts are producing further inequality too.  In 2010, those earning less than $40,000.00 received 0% of the tax cuts, while those earning above $70,000.00 received 90% of the tax cuts.  Is this fair taxation?  We need a progressive taxation scheme in this province, one that increases revenue, while protecting vulnerable, lower income people.

What could we do with that $2,288,300,000.00 in lost revenue?  Protect the environment, increase access to public services, improve education, just to name a few.  Develop renewable energy, build more energy-efficient affordable housing in rural and urban areas, increase daycare spaces, raise minimum wages and social support payments, are a few other areas that come to mind.  And public spending can increase local employment and individual spending if properly planned.

And what about improving public services?  Recent news stories about the lack of fresh food supplies in Nain and other coastal communities served by an aging fleet of ships raise serious questions. Why haven’t we created a reliable food system in the province, one that benefits those living in less accessible areas? 

It’s not hard to list the needs in Newfoundland and Labrador!        

Voters in BC were asked where they would put the additional revenues gained through changes in the tax rates there.  They said they would improve access to home and community based health services, invest in affordable housing, protect forests and endangered species, make public transit more accessible, retrofit homes to save energy, create a $10 a day child care program.  And they wanted transparency in how the increased revenue is being spent.

Should we have lower expectations of our provincial government?

Progressive taxation in Newfoundland & Labrador could reduce poverty levels in our communities and put more dollars into the hands of low income Newfoundlanders and Labradorians, support more programs that address social, economic and environmental concerns, and spur spending in our communities that would improve the economy. 

Don’t these sound like positive changes to you?

--Linda Cullum