By Joshua Errett
As appeared on page A1/A8
Amalgamating the four Atlantic provinces under a single government would significantly reduce the tax burden facing New Brunswick businesses, says the president of the Canadian Federation of Independent Business.
Catherine Swift, whose lobby group represents almost 2,000 New Brunswick businesses, has proposed the sweeping reform as a response to the high tax rates that have historically plagued the Atlantic provinces.
But she was recently convinced to revisit the well-travelled concept of regional amalgamation due to the small business tax increases in New Brunswick.
She says a government merger would save all taxpayers “serious money.”
“Why not?” she asks. “It’s not a huge population, and it’s not a huge geographic area.”
Swift says that reductions in the size of government, civil service and the subsequent ‘paper burden’ involved with filing taxes would equal a stronger economy.
“There is a lot of government (in Atlantic Canada). There really is,” she says. “If you think about it, in the Atlantic provinces, you have four administrations, four finance ministers, four health ministers, four of everything.”
According to 2007 census data, there are combined 2.3 million people living in Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island.
Swift, who travelled to the province from Willowdale, Ont., contends the idea of merging provincial governments is not as drastic as it may sound.
“For a taxpayer, I think it would ring a few bells,” she says, adding her’s is an economic viewpoint and is non-political.
At the root of Swift’s most recent amalgamation musings: the hike in New Brunswick small business tax rates from 1.5 per cent to five per cent – the steepest increase in Canada. Swift and the CFIB are avowed opponents of high taxes, and are outraged at all of the Shawn Graham government’s personal, corporate and small business tax increases.
“I think it’s just disgraceful,” she says.
In Nova Scotia, the Progressive Conservative government avoided raising income taxes, but increased user fees, cigarette taxes and instituted a levy on liquor. But one, united government might have skirted those measures altogether. The notion of one governing body for the four provinces is centuries old, dating back to the French colony of Acadia, which covered parts of what is now Nova Scotia and New Brunswick. It was established in 1604.
At present time, though, one government for four provinces appears impossible.
“I think we’re probably a ways away from that,” says Greg Byrne, the minister who oversees issues related to small business. “The idea of political unity has been a subject that has been debated for some time. The justification (comes from comparing) the size of the Atlantic provinces and the political size of the Atlantic provinces”Â‰”…”Â‰. But I really don’t sense any great movement from within any of the provinces (toward) that agenda.”
While Byrne laughs off the idea of political unification, he does say that political co-operation could be embraced more.
“There are certainly advantages to working together; working together on trade issues, working together on economic issues,” he says, mentioning aerospace and defence as areas where the four provinces could join forces.
In terms of tax savings, amalgamation is simply not the answer, says Charles Cirtwill, president of the Atlantic Institute for Market Studies.
“I think we’re talking about really marginal savings,” Cirtwill says.
While he agrees New Brunswick has “far too many” civil servants, Cirtwill contests the idea as a whole.
“Municipal amalgamations, for instance, have never realized huge savings,” Cirtwill says. “And the vast majority of the staff are on the ground delivering services. You’re still going to see education branch officers, hospital and health board staff. The only thing you’ll get rid of is three sets of ministers, three sets of ministerial staff, and maybe some policy branches.
“The core cost-drivers are still going to be there.”