ST. JOHN'S, N.L. — Progressive Conservative Leader Ches Crosbie promised tax relief Tuesday to get out of the private sector’s way of expanding their businesses, including aggressively reducing the payroll tax for those who create full-time jobs and handing out a hiring tax credit.
He also pledged a cost-benefit analysis to scope out and scrap any fees and taxes that cost the government more to administer than the revenues they bring in.
The cost to the tax coffers of further reducing the payroll tax would be $10 million over four years, Crosbie said Tuesday at his headquarters on Water Street in St. John’s.
He said other initiatives would be neutral for the government and, overall, the Tories have calculated that their tax incentives would create 1,000 new jobs.
PC Government would unlock hiring potential of NL business: Crosbie #NLpoli #BringBackJobs #LetsGetToWork #PCNLhttps://t.co/3XRKejUWEa pic.twitter.com/3JXW4glVZE
— PC Party of NL (@PCPartyNL) January 19, 2021
“Targeted tax relief works to drive job growth. It’s the tool in the province’s toolkit the Liberals don’t seem to know how to use,” Crosbie said.
He said a PC government would bring in a relocation tax credit that would make it easier for local businesses to attract talent from across the country and around the world.
The NDP said Crosbie’s pitch won’t help the sector that needs the biggest leg up.
“This latest Conservative promise does nothing for the small businesses that are so important to the future of this province. Essentially, they plan to cancel the fifth-largest tax stream in government’s budget in the hopes that the Loblaws of the world will create jobs instead of feeding the tax break back to their shareholders,” said NDP Leader Alison Coffin.
“The Tories had plenty of opportunity to get rid of the payroll tax when they held office in more prosperous times. Why is it a priority now? New Democrats are in favour of a full review of our tax system to make it fairer for everyone, but this sort of cherry-picking is not the way to build a healthy economy.”
Liberal Leader Andrew Furey, who was campaigning on the west coast Tuesday, said in a statement that he is glad to hear the PC leader would welcome recommendations from the Premier’s Economic Recovery Team.
“The PC leader continues to boast ‘Jobs, jobs, jobs’ without a solid plan to deliver them. Newfoundland and Labrador actually has more jobs, during a pandemic and global economic crisis, than his party thought in their five-year economic forecast. Now that we are in an election campaign, it’s clear the PC leader will promise anything to anyone, without providing a plan for where the money comes from,” Furey said.
"... it’s clear the PC leader will promise anything to anyone, without providing a plan for where the money comes from." — Andrew Furey
The Liberals said Furey’s leadership of the province would take a visionary approach to reimagining government and the provincial economy “for our collective future, which in turn, will create and sustain good jobs and prosperity for all Newfoundlanders and Labradorians. A number of recent investments and initiatives in the technology sector and its future are part of that commitment.”
Crosbie, hinting at the three-month "supermarket strike," said he wants to end the phenomenon of big companies changing full-time jobs to part-time jobs. He says a reduction in payroll tax on full-time employment will help that cause.
Newfoundland and Labrador's payroll tax — which is actually officially known as the health and post-secondary education tax — sees employers who have a payroll of more than $1.3 million taxed at a rate of two per cent over that $1.3 million.
In January 2019, the Liberal government increased the exemption from $1.2 million and the Tories raised it to $1 million in 2008, and to $1.2 million in 2011.
As for the cost-benefit analysis on taxes and fees, Crosbie said that should be done in-house by the government and wouldn’t require striking a committee.
Crosbie said he won’t help businesses by cutting social programs.
“As I have consistently said, our approach is to grow our way out of our problems. That’s how we are going to get on top of our deficit and be able to afford the social programs and public supports for the vulnerable that we have in this province and, for that matter, improve on them,” Crosbie said.
“We all know we have a social contract that sees us raising taxes in certain ways, but after a certain level it becomes uncompetitive for business to create jobs, and we in many ways here have reached that level. So I am talking about the rejigging and restructuring of the tax system to remove barriers to growth.
“You either believe in growing the economy and believe that getting out of the way of businesses is part of the way you do that, or you don’t.”
“You either believe in growing the economy and believe that getting out of the way of businesses is part of the way you do that, or you don’t.” — Ches Crosbie
Asked about where the party stands on a $15 per hour minimum wage, Crosbie said it’s a tough time to move beyond the incremental increases that are already scheduled.
“I am open to these arguments. Right now, it is a very sensitive time for small business owners, regretfully,” Crosbie said.
“I see the argument for it, but these are not the most auspicious circumstances to be aggressive about the minimum wage.”
In April 2020, the Liberals raised the minimum wage 25 cents, and by 50 cents in October 2020, bringing it to $12.15.
On April 1, the minimum wage will increase in keeping with the national consumer price index, based on the established formula, and in addition will be increased by 25 cents, according to a February 2020 government news release. On Oct. 1, the minimum wage will increase again by 25 cents.
