‘ We have to make tough choices’
Whalen talks at Sydney tax workshop
SYDNEY — There were about 40 people who turned out for a workshop in Sydney on taxes, the tax system and the upcoming provincial spring budget, Monday evening.
Finance Minister Diana Whalen said it’s important to hear from people what they would like to see in a reformed tax system, and how the province could get to a balanced budget.
“We can see our financial challenges growing, and we have to make tough choices now,” she said.
The fact the province only gets its taxes from a few sources might need to be examined further, Whalen said.
Nova Scotia’s tax system consists of mainly personal and corporate income taxes, the HST, and fuel and tobacco taxes.
The province’s changing demographics are forcing the government to look for alternative sources of revenue.
Personal income taxes account for about 25 per cent, or $2.1 billion, of Nova Scotia’s tax revenue.
However, an aging population means the amount of personal income tax collected will shrink.
Big Pond resident John MacDonald had a lengthy discussion with Whalen about equalization payments during the workshop.
He said it doesn’t make sense to have consultations on how the provincial government should restructure its tax system without looking at how municipalities tax its residents.
“Unless you look at in total, you’re ignoring that, ‘Hey, there’s a bunch of bills you’re not paying,’” said MacDonald, who noted the vast majority of equalization funding ends up in the province’s general revenue and not to its intended purpose to aid struggling municipalities.
As it stands now, there are twodozen tax benefit exemptions, credits and reductions in sales taxes.
Over the years, Whalen said previous governments instituted the provincial 10 per cent of the HST taken off children’s clothing, printed books, home heat, and feminine hygiene products, among others.
She said the cost of these tax benefits are paid from revenue raised from sales taxes.
“It’s really a mish-mash of items that successive government have said, ‘Let’s forgive the HST on this, or that, or the other thing. And overall it adds up to a lot of money.”
A review of the province’s tax and regulatory system released in November called on the province to not increase the HST, but collect tax on items previously exempt by other administrations.