Description: This week the New Brunswick government released its budget for the coming fiscal year. And one budget item got first page attention on the front page of Canada’s national newspaper, the Globe and Mail. The Globe featured an article noting how New Brunswick’s budget promises a tax cut for the wealthiest citizens in order to offset the effects of Justin Trudeau’s planned tax increase. The NB Finance Minister said “we did that to be more competitive.”
Date: February 3, 2016
1) Do you agree with the Finance Minister’s notion that lowering personal taxes will make the province more competitive? Explain your answer.
2) The article notes that other provinces may also follow suit and lower their income tax rates on high earners. Which jurisdictions do you think might do this?
3) While New Brunswick cut this personal income tax rate, it raised corporate taxes and the harmonized sales tax. What do you think is the right mix of tax measures to help provinces struggling with deficit financing?