By Zane Woodford
Local business leaders have mixed opinions about Nova Scotia’s plans to further reduce taxes on small enterprises.
Taxes will be reduced from 4.5 per cent to 4 per cent, effective Jan. 1 2012. This is the government’s next step in the jobsHere program, intended to boost the province’s economy and create jobs for Nova Scotians.
Vice-president of the Canadian Federation of Independent Business, Leanne Hachey, is happy with the government’s action regarding taxes.
“It sends a message that taxes are too high and they are acting to move the province in a different direction,” says Hachey. “More important is the message that it sends that we understand that our taxes are too high and that government is lowering them. Every small business owner out there, whether they’re affected or not will see this as a good move. Every dollar counts.”
The province has acknowledged that tax rates are too high. Nova Scotia small business income tax rates are the highest in the country.
“These reductions represent a 20 per cent drop in the rate of income tax for small businesses, reducing the provincial tax impact on them,” says Patrcia Jreige, communications adviser for the Department of Finance.
The province has declared 2011 as the Year of the Entrepreneur — a symbolic gesture that shows business-owners that the province recognizes their efforts and cares.
But Hachey says they can’t stop at tax reductions.
“They can illustrate that small business owners matter. Even with this cut, we still have some of the highest tax rates in the country,” she says. “We always talk about reducing red tape. There are rules on the books that don’t do anything, yet business owners still have to learn all these rules and comply with them. We link reducing red tape and tax relief as ways of boosting productivity.”
Red tape refers to hours of paperwork and bureaucracy.
However, some business owners aren’t as satisfied with the changes.
Katherine Sharpe, owner of The Flower Shop in Halifax, questions whether what the government is doing will help her business.
“It will save me some money,” she says, “But it seems like more icing, no cake.”
Sharpe is more concerned with the rise in minimum wage in Nova Scotia. Minimum wage has increased twice in the past year, from $8.10 to $8.60 to $9.65. There is talk of another increase this coming September.
“They’re just trying to appease the situation with the rises in minimum wage,” says Sharpe. “It keeps going up, and it’s going up again in September, and that hurts more than tax.”
While the cut may not make a huge difference for small-business owners, everything helps. The province is working to further lower tax rates and reduce the red tape.
Hachey and her group are lobbying the government to do more for small business and hopes to see measures for small business in platforms for the upcoming federal election.
“It doesn’t matter what party it comes from,” she says. “Anything that can reduce the burden and the number of forms that (business owners) have to fill out and the number of rules that they have to comply with is something we’re looking for in all party platforms.”