Memo to Nova Scotia's Tax and Regulatory Review: Raise taxes!

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Here's something else that would advance our cause in Nova Scotia if we could only talk about it without the pious platitudes: taxation.

As it turns out the provincial government has its Tax and Regulatory Review on the case. This could be a very useful exercise if it actually goes to the root of the matter. But will it? Or is it meant to chow down on the prevailing dogma: that the only way forward is to reduce taxes, especially business taxes, and to avoid at all cost the heresy of topping up taxes for the highest earners.

Hopefully the review committee, led by public policy expert and former Ontario cabinet minister Laurel Broten, will take account of the problems with this creed.

Consider. The international tax and audit firm KPMG, as of 2014, rates Halifax as the fifth lowest-cost city in which to do business out of 89 in North America, with other Nova Scotia communities similarly rated -- and taxes being hardly a problem.

Indeed, according to the group Canadians For Tax Fairness, Nova Scotia already has relatively low corporate taxes and lower than average taxes for the highest earners. Yet none of this can seem to get into the conversation that has us as high-tax, anti-business and anti-everything. I invite the review committee to pin down where we actually stand on the comparative tax scale.

I also invite it to take note of what's going on next door. New Brunswick Liberal Leader Brian Gallant, who's 25 per cent ahead of the governing Conservatives in the polls as the election campaign opens, has vowed to create a new tax bracket for those making over $150,000 and to rescind a 2012 cut of the business property tax, raising $63 million a year in all.

What's more, the New Brunswick Business Council supports him -- president Susan Holt having stated that, with regard to the property tax cut, business didn't ask for it and the province would have been better off putting the money on its deficit.

Indeed, if not in Nova Scotia, here, there and elsewhere you find business-people acknowledging that governments have to pay their bills and it can't all be done by cutting. Legendary billionaire Warren Buffett encouraged President Barack Obama, keeper of the mother of all deficits thanks in part to the infamous Bush tax cuts, to tax people like him more when he found out he was being taxed less than his secretary.

So to the review committee I say: consider tax increases. In so doing, ask and try to answer this question: How many people who earn over a certain figure per year -- say $90,000 -- are actually in the public sector? Considering that public sector salaries and pensions have gone over the top over the years, and are a growing problem pretty well everywhere, wouldn't this be a way of getting some back?

Indeed, I think of that letter of reprimand a group of NDP professionals, mostly academics, sent to the Dexter government a couple of years ago, pointing out their own good financial fortune and demanding they be taxed more so social services could be extended.

Taxing more to extend social services is probably not on any time soon, but raising more money to keep the deficit under control surely can be.

And here's another point against the grain that the committee, I hope, will chew on. You likely haven't heard of this, but it's being noted in informed circles all over the world. Five years ago, British Columbia instituted a carbon tax. And it's working. B.C. has been reducing its energy use far faster than the national average, and its economy has not suffered, contrary to the usual jeremiads. The tax is not a source of revenue -- by law, the money raised goes to cutting personal and business taxes.

For conservation reasons, this is where we all need to be in future, wherever the revenue goes. And although, given our politics, this is probably not on either any time soon in Nova Scotia, a strong statement by this review committee might at least help stop us from doing the opposite: that is, subsidizing energy, a counterproductive instinct that's at the core of our politics.

The NDP took the provincial sales tax off energy (thus subsidizing energy for rich and poor alike, and losing millions in revenue -- would the Liberals dare restore it?), the Liberals got popular before the election last year by rattling on about power rates, and the Conservatives proposed to freeze power rates for five years, repeating an energy/financial catastrophe induced by the Buchanan government in the 1980s.

Then, to name names, there's the Halifax Chamber of Commerce rattling on again about the desperate need to cut taxes. These are the same guys who are the first aboard when any taxpayer-funded white elephant comes trotting through Halifax. Note to the McNeil government: keep your distance from these characters.

Ralph Surette is a freelance journalist in Yarmouth County. This column was first published in the Chronicle Herald.

Photo: Phillip Ingham/flickr

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