You know things are looking up when the province manages to both balance the budget and offer a tax break.
Let’s not make any assumptions about Nova Scotia’s financial situation and the economy being red hot, but we haven’t seen those two things line up in recent memory.
In fact, Premier Stephen McNeil is touting this as the largest tax break in the province’s history – even if Finance Minister Karen Casey is phrasing it a bit more cautiously, calling it “one of the largest tax breaks in our province's recent history.”
At any rate, the tax cut that took effect this week will see an increase in basic personal exemption on a sliding scale up to $3,000 for taxable income up to $75,000. It will impact more than half the province’s residents, putting an average of $160 back in the pockets of workers, with the greatest benefit going to low- and middle-income earners.
The change is estimated to represent about $85 million to taxpayers – much of which, in the case of lower-income workers, will be spent on necessities and thus go back into the economy.
A main concern in financial policy change should be those earning lower income, and NDP Leader Gary Burrill’s response to the cut was to reassert his party’s contention that the minimum wage needs to see a substantial increase. The NDP want to see it reach $15.
Burrill certainly has some ammunition in making the case, given that Nova Scotia’s minimum wage at $10.85 is the lowest in the country. The province did, however, recently have discussions with the other Atlantic provinces and one item was an aim to have the minimum wage on par in those provinces.
That would tend to mean some increase in the short term, and less likelihood to lag in coming years. Movement on this is certainly overdue. And a couple of provinces are getting closer to that higher mark – Ontario, for example having set it at $14 as of Jan. 1 and aiming for $15 by next year.
But voices in the business community that say a $15 minimum wage would have negative consequences should be heeded. Business leaders have said it would mean companies would simply be able to hire fewer people, or that they would have to cut hours and benefits.
People will doubtless take notice of the move by a Tim Hortons franchise in Ontario informing employees that, due to the wage increase, they will lose out on paid breaks and pay more toward benefits.
That will sound like drastic action to many hearing that news, but we have to wonder whether it might be the new norm at some businesses if minimum wages are hiked substantially over a short term.
There’s no easy answer or easy fix to the challenges faced by those on the lower end of the pay scale. But we have to see any move toward people keeping more of the money they earn a bright spot.
