Nova Scotia premier says middle-class tax cut largest in province’s history

The Liberal government floated the tax cut last April as part of a surplus budget in the run-up to a provincial election. CP Images

More than half of Nova Scotians are getting a tax break as what Premier Stephen McNeil calls the largest tax cut in the province’s history takes effect this week.

The tax cut took effect Monday for about 500,000 Nova Scotians, reducing their taxes by an average of $160, the premier says. It increases the basic personal exemption on a sliding scale up to $3,000 for taxable income up to $75,000.

“What we have done here is actually ensure that those in our province who need the help the most get the largest benefit of this change,” McNeil said in an interview on Tuesday.

“These are big numbers, and it’s the largest tax change that impacts Nova Scotians in our provincial history, in a positive way.”

READ: How will the Nova Scotia budget hit your pocket book?

The program will have an $85-million impact on provincial taxpayers, said McNeil, with benefits weighted towards low- and middle-income earners.

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He says 63,000 Nova Scotians are no longer paying provincial income tax, which the province said could translate into savings of up $264 per year.

Low-income earners will see the greatest tax-exemption increase under the new regime, approved as part of the provincial budget last fall, with the amount declining as income level rises before capping out at $75,000.

Better-off Nova Scotians will pay the same rate as they did before 2018, but McNeil said putting money back into some taxpayers’ pockets will boost the provincial economy overall.

“We believe by adjusting the basic personal exemption for those who require it the most, it will leave the buying power there for years to come,” he said.

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McNeil called it “the largest tax cut in our province’s history,” but in a statement Wednesday Finance Minister Karen Casey used slightly different terminology, calling it “one of the largest tax breaks in our province’s recent history.”

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NDP Leader Gary Burrill said Wednesday that increasing Nova Scotia’s minimum wage to $15 from $10.85 per hour after would have a far greater impact on the province’s low- and middle-income earners than the “modest” tax cuts the McNeil government has put forward.

“We’re living an increasingly $15-minimum wage world, but the McNeil Liberals have only increased Nova Scotia’s minimum wage this year by 15 cents,” Burrill said in an interview on Wednesday.

“We need changes in Nova Scotia and in our economy that would help us to really address this competitive situation, and tax changes don’t do it.”

Without the tax program, McNeil said the buying power of his government’s 15-cent minimum wage increase, which took effect last April, would be absorbed by the cost of inflation.

The Liberal government first introduced the tax cut last April as part of a pre-election budget that was never passed. McNeil touted it as proof his fiscal restraint on public sector wages would lead to direct benefits for taxpayers.

At the time, the president of the Nova Scotia Teachers Union said the tax cut was coming at the expense of students and teachers.

On Tuesday, McNeil said he doesn’t believe his government sacrificed salaries to fund the tax cut.

“We are treating public sector workers in what we believe is a fair and balanced way, which is with a seven per cent pay raise over six years,” he said. “In other parts of country, where public sector wages are being rolled back, we actually held the line and gave a modest increase.”


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