We’re almost at the end of the worst of the pandemic in Newfoundland and Labrador, and by all accounts we seem to have fared better than most other jurisdictions in this country. So we have survived the worse health issue we have had to confront.
Or have we?
There’s an old saying that there are only two things certain in this life – taxes and death. But we could easily add a third – taxes that go up never again come down. So while COVID-19 outbreaks are hopefully nearing an end, it appears that for the next several years residents of this province will all be bearing the burden of paying for the economic recovery through a number of measures outlined in the recently released provincial budget.
Although some of these will only affect a small portion of the population, such as the new taxation brackets for the top earners, as well as a gradual phasing out of the Memorial University of Newfoundland and Labrador (MUNL) tuition freeze, a number of others will have an impact on a much larger segment of the population.
Chief among those will be the so-called “sin taxes” on tobacco products and vaping paraphernalia. And although not mentioned specifically in the document, one would be wise to forecast a few extra dollars for liquours and wines. We will also now have a 20 cent tax per litre on sweetened beverages in the Province, something that in other jurisdictions has been referred to as a “fat” tax. So your rum and coke just got a little bit more expensive at home and at the pubs, once they re-open.
In addition, the tuition for the campuses of the College of the North Atlantic are under review. One would surmise that as for MUNL, these will probably undergo a gradual increase, thus affecting a greater number of individuals trying to reorient their career.
Looking at some of the actual numbers, a tax increase measure will be applied for individuals earning in excess of $136,000/year, and new tax brackets will be created for those who earn yearly income of 1/2 million and 1 million. These brackets will see an increase on their taxes beginning at 1% in the lowest of the three mentioned.
Two Crown corporations will be rolled into the core government, NL911 and the Newfoundland and Labrador Center for Health Information.
There are some breaks included in the new budget as well, such as the Physical Activity tax credit, to the tune of $2,000 per family. Also, homeowners who convert from oil to electricity are eligible for a rebate up to $2,500.
Some of the measures outlined and intended to bring the provincial finances back to a manageable level will no doubt meet the approval of a great number of residents, such as the redefining of NALCOR, the consolidation of administrative functions of the various Health Authorities, and bringing the English Board of Education under the auspices of the ministry. But some critics have also pointed out that one glaring portion of our citizens has been left out – the lowest paid of our workers whose basic poverty line wages leaves them struggling to make ends meet week to week.
Based on the current oil market prices, the Minister of Finance is forecasting a deficit of $825 million for this fiscal year, and indicates that should we stay the course, we should have a balanced budget within the next six years.
However, a great deal of public consultations need to occur. So a great deal still needs to be done as we strive to bring the province back from the brink of bankruptcy if we are to build a truly fair and equitable society moving towards the future.
Bars and restaurants have been all but shuttered for several months. This hits especially hard for workers who depend on tips to make a living wage, and the tourism industry may be a while in recovering. Some businesses have gone under permanently, despite federal and provincial government programs designed to assist.
It is high time that this province gets with the program, and bring the minimum wage to $15.00, or better yet, that government at all levels institute a universal basic income for all adults. With a greater income structure on which to base its taxation, the provincial debt would benefit and a little at a time manage to drag itself from the brink.
In Ontario, a tentative foray into UBI saw people who had been living on the street able to afford food and shelter, returning money into the economy, and some found employment and begin paying taxes. There were lengthy news articles written on the benefits, including those related to mental and physical health. A new government chose to put it to a halt, but did they really save so much? Surely offering such stability would reduce the necessity for building large scale institutions like prisons, shelters and rehabilitation centres?
Why are large service providers with enormous profit margins able to avail of public monies because of COVID-19? There is almost no competition in many rural areas of the province to dissuade them from increasing rates, even if there is service, poor as it is.
Why is the cost of a single ham now $40? Few can afford to buy it and it is likely to rot before anyone pays that price. Hikes on the sugary goods are fine in principle, but consumers have been turning to junk food for far too long because healthier options are either spoiling before they reach stores due to transportation logistics or they are far too costly. It’s all well and good to discuss food sustainability, but food affordability must also be considered.
Furthermore, the oil industry has been in dire straits for some time, and a number of the people employed by them have had to turn to Employment Insurance for the first time. For a province rich in this resource, we pay a high price at the pumps already, even without another hike.
What of the fishing industry? Three decades after the moratorium has come in there is no improvement. Is this due to seals, foreign draggers or mismanagement? The answers remain unclear and unacceptable, with no end in sight. To get answers one must navigate a federal and provincial hiatus long before ever speaking with a scientist. The fishers out on the water are far too often considered last and least, but they are in fact the front line of the industry.
Even with the federal recovery benefits (CERB), it is inconceivable that we should continue to have people such as Air Canada executives receiving huge bonuses. MUNL tuition hikes are long overdue, but is the President of the University really deserving of more pay than the Premier? Introducing legislation that prevents these egregious salaries and bonuses regardless of performance on the backs of the taxpayers is no longer an option but a necessity.
The return on these investments is surely better than relying on volatile world markets to bump the oil prices.
As a society, we residents must do our part too. It’s no longer reasonable to expect the government to maintain unsustainable high levels of service or boost the work force with projects designed to offer enough hours to qualify for Employment Benefits.
A more sensible approach, and one that does seem to be happening, is focusing on backing entrepreneurs and small business endeavours instead. New technology startups and the growing film and television industry means jobs and that will entice more people to move to our province. Increasing taxes on an aging population is just another short-term stop gap.