The Garden Plot

Taxed to death –Tax Reform in Nova Scotia


The old adage that the only sure things in life are taxes and death, is one we know all too well in Nova Scotia.   Our current tax regime makes us one of the highest taxed provincial populations across the country.   When our current government came to power a full tax system review was commission.  Back in November 2014, Laurel Broten delivered her report to the government.   Residents have until February 28th, 2015 to submit their thoughts on tax reform and their report. 


When the report first came out, I heard some media around the recommendations.  However, I did not take an in-depth read of the report.   Over the weekend I have had a chance to read the report and there are some good points made by the author.   However, one of the things that I feel has always made our province work is balance.   I don’t feel that if even some of these recommendations were instituted as is that we would ensure balance across our province.   All across our province there are many people living in poverty or n the category of working poor.  The main focus of this report a shift to consumption based taxes would hurt already at-risk Nova Scotian’s the most.


Consumption Based Tax System Will Hurt Us (Right now)

 “Recommendation 1.3 – Broaden consumption taxes: Nova Scotia should eliminate rebates for the provincial portion of the HST on printed books;children’s clothing, shoes, and diapers; feminine hygiene products; residential energy;and first-time home purchases. Nova Scotia must offset the impact of a broader HST basewith increases to the Affordable Living Tax Credit and reforms to the Heating Assistance Rebate Program (HARP)”


Broten believes that by raising the basic personal tax exemption to 11,000 annually that that would allow people to shoulder the increase of consumption based taxes.    If there was more equity in wage rates across our province, I could be led to agree with them.   Retooling our tax system from an income based tax system to a consumption based system is a game of musical chairs.   Tax credits do little to help Nova Scotian’s in their day-to-day life.   Truly, they are a net benefit when one considers the whole picture.    Also, by adding taxes to the above mentioned products would systematically place a huge burden on all Nova Scotians.  


Also, the suggestion to lower the corporate tax rates while increasing the small business tax rate over time is regressive.   The reality is that in our economy and in economies across our country, small business is what drives the economy and creates jobs.    Holding the small business tax rate at the current rate makes sense because that will allow our economies to continue to grow.


After reading the report, I find little  “bold” about this proposal.   Do we need to think long term yes, however that long term is not by rewarding the rich and burdening the poor.    While the report is honest, and open I don’t feel we are in a position to jump to a consumption based system.   

I would caution the current government on implementing many of these recommendations.   The one glaring fact is that we can’t afford to not act.    


Do we make any changes?


So, what do we change?  How do we move forward while not leaving many behind?  I agree with the suggestion to hold governmental spending.  Also, I like the idea to increase the basic personal tax exemption – but to 10,000 and not broaden the HST base.    I would suggest that to help  Nova Scotian’s become familiar with a consumption based system that we have a revenue neutral carbon tax.    This would be a good means for Nova Scotians to ease into a tax system switch.     The  system review was a good source of information for government and the public, and I am hopeful that with feedback initiated by this report we will get a tax system that works for all Nova Scotians.