Advocacy groups slam P.E.I. government over 'sneaky' tax hike

Teresa Wright
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Finance Minister Wes Sheridan

Two organizations that advocate for tax fairness are slamming the P.E.I. government for what they call a sneaky tax hike this year.

The Canadian Taxpayers Federation and the Canadian Federation of Independent Buisness (CFIB) are upset over Finance Minister Wes Sheridan’s refusal to increase the basic personal income tax exemption.

By leaving it untouched since 2008, Islanders have been paying incrementally higher taxes every year because it doesn't increase with inflation.

"Each year you get hit with a tax increase for no reason," said Kevin Lacey, Atlantic director for the Taxpayers Federation.

The federation says a single income family with two kids that makes $60,000 a year will pay $136 more in taxes in 2014 than in 2013.

In P.E.I., the basic amount one can claim before paying tax is $7,708, which is the lowest in the country.

“This is an issue of government getting extra revenue every year on the backs of Islanders, said CFIB’s Erin McGrath-Gaudet.

“We pay a lot of taxes in this province. We’re worried about out-migration, people are heading west for higher salaries, but this is one way that we could help Islanders who are staying here.”

McGrath-Gaudet says low-income Islanders already struggling to meet their basic needs are most hurt by this issue, known as bracket creep.

Islanders earning minimum wage saw their personal income tax rate almost doubled over the last 10 years – something McGrath-Gaudet calls ‘shameful.’

“The actual impact on take-home income is greatest for those people who on the lower of the salary scale,” she said.

Opposition MLA James Aylward raised the issue in the legislature in December, asking Sheridan to commit to raising the exemption.

But Sheridan has continually refused, saying he does not believe it is the best way to help low-income Islanders, as those with higher incomes would also benefit from adjusting the tax brackets.

McGrath-Gaudet says she does not buy this argument.

“If the finance minister was really concerned that this would benefit high-income earners too much, there are other ways that he could tinker, whether it was from that surtax or creating a new tax bracket,” she said.

Both she and Lacey have been calling on the P.E.I. government to do what all but three provinces in Canada have done – take politics and budget cycles out of the equation and allow the personal tax exemption to automatically adjust to inflation.

Aylward pointed out this is what the province has done with most provincial fees and government service charges.

“They have no problem tying those fees to CPI but at the same time they don’t believe in tax fairness, they won’t give Islanders a break and tie these personal tax exemption to CPI as well.”

Aylward said he strongly believes this could not only be a measure to help low-income Islanders, but also one that could help boost the province’s economy.

“If people have more money, they’re going to either invest it or spend it.”

Sheridan has said it's an issue he won't look at until the province's budget is balanced in the 2015-16 fiscal year.

 

twright@theguardian.pe.ca

Twitter.com/GuardianTeresa

Organizations: Islanders, Canadian Federation of Independent Buisness

Geographic location: P.E.I., Canada

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Recent comments

  • booya
    January 07, 2014 - 16:48

    I'll try again to voice my opinion-the first time wasn't printed. I wonder where Wes got his PHD in economics! Most economists agree that raising the income personal exemption rather than an add on tax like the gst(feds) is much better way of helping low and middle income earners. It's appalling Wes.

  • candrayo
    January 07, 2014 - 12:34

    Shocking is a word that should be old news when used to describe our men like wes up there making the decisions…APPALLING is more like it! But the people backing them still on this Island….SHOCKING!!!

  • Romeo
    January 07, 2014 - 12:00

    I think "Taxed to death" is pretty close to my thought. Maybe the whole purpose of this tax situation is to fund the PNP program. The thing that anoys me is that they aren't doing anything to keep Islanders at home or to bring them back. How about an incentive that will bring Islanders home like No charge building permits or your first license plate is on us. I wonder what they are giving to the immigrant population to get them started?

  • Walt
    January 07, 2014 - 08:39

    What would you expect from Wes The HST. Deceit should be in the middle there somewhere.

  • Safe Move
    January 07, 2014 - 08:16

    Sheridan has said it's an issue he won't look at until the province's budget is balanced in the 2015-16 fiscal year. Very safe move on his part , just what are the chances of him still being there then & the way this goverment works , a balanced budget is just like the lotto 14,000,000 to one odds of ever seeing it . We Islanders are just so easy to BS over .

  • toldyouso
    January 07, 2014 - 07:31

    The extra tax dollars will be used to pay for the new horse barn at the CDP.

  • Beyond Sneaky, I am Totally Creeped Out
    January 07, 2014 - 07:10

    The Ghiz team, totally creeped out by them.

  • Taxed to death
    January 07, 2014 - 00:30

    Sickening how Wes Sheridan is gouging islanders after squandering money to liberal supporters. That's why I left pei I am tired of being taken advantage of . I am one of the out migration workers and I'm so glad I made the move , my life is so much easier not living pay check to paycheck . I hope more people leave pei and do the same so they can move more immigrants in with the pnp program.. You liberal party make me sick