Letter to the editor

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Mr. Roly MacIntyre

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Chairman

Select Committee on Tax Review

Dear Sir:

At the public presentation on Taxation in Fredericton, you expressed some frustration with the fact that presenters, including myself, (Roger Duguay, leader of the Provincial NDP), dealt with only the universal aspects of your party's taxation proposals - those that would affect all individuals, families, and businesses. You indicated that, in your opinion, there were proposals which offered solutions to the concerns raised about the direct affects of the proposals on middle and lower income citizens of the province and they deserved some attention. The NDP did not deal with these particular proposals because, in our view, they are not a solution to the problems that would be created by your general proposals. May we offer the following comments on that limited area:

As background, Section E of the Department of Finance's "Discussion Paper on New Brunswick's Tax System" proposes several programs to offset some of the negative effects a new taxation scheme may have on families in New Brunswick - focusing primarily on those with middle and lower incomes. The programs that they propose are a Non-Refundable Child Tax Credit and a New Brunswick Universal Child Care Benefit. In Section G they propose implementing a New Brunswick Climate Change Tax Credit to offset the extra costs lower income New Brunswickers will incur due to the proposed addition of a carbon tax.

You will note that:

- The Non-Refundable Child Tax Credit will provide a personal income tax reduction of up to $400 per child but is available to all families, rather than being income tested. This will do nothing to "even the playing field" for lower income families.

- The New Brunswick Universal Child Care Benefit will provide families with $50 per month for each child under the age of six. This is similar to the federal government's plan that provides $100 per child under six. They indicate that this amount will be provided "on the same basis as the existing federal benefit and will be provided to all families, regardless of their income level." Again, this credit does nothing to even the playing field for lower-income earners. In fact, the income families receive from this credit is taxed by the government - often with lower income earners and single parents getting to keep a lower percentage.

- Even with the additional $50 per month, this amount will not be sufficient to cover the costs of child care in New Brunswick. With the combined amount of $150 per month this does not even cover half of the child care costs of New Brunswick families - the average monthly cost of child care for a child under six years of age in New Brunswick is over $400. This credit is only in place so the Liberal government can say they are "doing something" to address the child care crisis that exists in our province. This proposal will not cut it - $50 per month does not make child care more affordable, nor does it create much needed spaces.

- The proposed New Brunswick Climate Change Tax Credit is ill-defined at this time. The discussion paper in no way outlines what type of formula would be used to determine the amount of the quarterly payments - will this be a set amount per individual or will this vary from person to person depending on the amount of carbon tax they paid?

- It is doubtful that these amounts will be enough to fully recover the costs these individuals are paying in carbon tax, and this program does not attempt to recompense middle income earners from the financial hardships these taxes will place on them. Many New Brunswick families are already having a very difficult time paying their energy bills.

- The paper proposes that this program - the New Brunswick Climate Change Tax Credit - will replace the Home Energy Assistance Program (HEAP). That suggestion does not even make sense. HEAP is in place to help families who are having problems paying their current energy bills - the province has recognized that this itself is an issue and will provide households with total family incomes of less than $25,000 per year a one-time cheque for $100. This program is in place to address the already burdensome costs of heating homes; the Climate Change Tax Credit is being created to offset the costs of a carbon tax.

Clearly, one does not replace the other; they have two different objectives.

- Taxing New Brunswick families for their carbon use will not cause them to make greener choices in the future. Many New Brunswickers are conscious of the amounts of carbon-taxable items they consume because of the already prohibitive costs of these goods.

- In many instances, reducing the use of fossil fuels is not yet an option for many families because the alternatives (converting the heating system in their home, for example) are not something that is financially viable for them at this time. Charging them extra money for these items will not place them in a better position to transition to the future as they will have less money to save.We trust you can now appreciate that these particular proposals are no better than the universal ones. Clearly, these programs are not sufficient to mitigate the harmful effects the proposed changes to the taxation system will have on New Brunswick's lower and middle income families. The New Brunswick New Democratic Party does not believe that the New Brunswick Liberal government is looking out for the best interests of the families of this province.We trust you will include this letter in the public comments to be considered by your committee and ensure that real solutions form part of whatever reforms you attempt in the fundamental taxation structure of the province.

Roger Duguay

Leader

New Democratic Party of New Brunswick