The New Brunswick government is the latest provincial government to reverse the corporate tax cuts that the federal Conservative government had pressed provinces to make. In their provincial budget tabled March 26, the NB government hiked corporate taxes back up to 12 per cent from 10 per cent resulting in an estimated $17 million in additional revenue. Personal income tax rates were also raised back to 2006 levels, in a tacit admission that the tax cut strategy has been a failure. With a projected provincial deficit of $479 million, the government had to consider revenue side solutions.
There had been public pressure from groups such as the NB Common Front for Social Justice and the New Brunswick Business Council to roll back the failed tax cuts in order to reduce the deficit and avoid further cuts to key services such as health and education.
The Harper government has pressed for provincial corporate tax cuts to match cuts by the federal government. But Ontario, Quebec, BC and now New Brunswick have all either rolled back or cancelled planned corporate tax cuts.