The provincial government is throwing out the tax on books and reviewing the entire tax system.
Tom Osborne was appointed as finance minister back in July, and in one of his first moves announced a sweeping review of the provincial tax system. Osborne says the spending situation in the province is out of control and government is working hard to reign it in.
He says we owe about $15-billion so every time a person says government should spend more money on something, what they are really are saying is government should reach deeper into the taxpayer’s pocket.
When the Liberal government took office back in 2015, the deficit was $2.7-billion.
In 2016, then-finance minister Cathy Bennett announced a host of tax and fee increases to combat the ballooning debt, and satisfy the province’s lenders. That included a gas tax, HST hike and deficit levy.
Osborne says the province is now borrowing just over $2-million a day, down from $7-million, and it’s all due to the measures the Liberals have put in place since coming into office. He says there wasn’t time to drill down and find where efficiencies could be found, so they had to take quick measures. Nobody in this province knew the true numbers of the projected deficit.
With a tax review now underway, Osborne says government is looking to make taxes fair for everyone in order to make Newfoundland and Labrador a place people want to live.
He says nobody liked the measures that were put in place during the 2016 budget, not even the people who put them in place, but this tax review will ensure taxes are fair and balanced for everyone in the province.
The cost of the review is around $100,000.
Government Must First Reduce Spending: Employer’s Council
Employers in the province are puzzled by a review of the tax system being undertaken by government. We have the highest taxes of any province in the country on the heels of budget 2016, but the Employers Council of Newfoundland and Labrador says taxes won’t come down until government reduces spending.
Executive director Richard Alexander says government spending is out of control and even now, despite record deficits, it continues to expand its budget.
Alexander says government has a great opportunity to reduce spending by being tough with the unions in the current round of bargaining. Thousands of workers are now without a contract.
For example, he says sick leave costs government $125-million a year, more than it spends on road paving.