The truth is that Nova Scotia Premier Tim Houston is using health care as an excuse to continue profiting off inflation at taxpayers’ expense. Photo Credit: X/Tim Houston.
Nova Scotia Premier Tim Houston is the only first minister in all of Canada deliberately profiting off inflation at taxpayers’ expense.
By refusing to adjust income tax brackets up by the rate of inflation, the Houston government has been raising taxes every year by pushing taxpayers into higher tax brackets even though they can’t actually afford to pay more. That’s what economists call bracket creep.
From British Columbia to Newfoundland and Labrador and everywhere in between, every provincial government save Nova Scotia’s has acknowledged it is unfair to punish taxpayers simply for getting a cost-of-living pay raise. Only Houston’s government in Nova Scotia doesn’t have a plan to adjust income tax rates to ensure bracket creep doesn’t occur.
Until last year, Houston was able to hide behind the fact that neighbouring Prince Edward Island also penalized taxpayers simply for keeping up with the cost of living.
But in last year’s spring budget, Prince Edward Island Premier Dennis King unveiled plans to adjust his province’s income tax brackets to keep up with inflation and committed to reviewing income tax rates every year thereafter.
Now that King has recognized the dangerous and punishing nature of bracket creep, Houston stands alone.
Houston’s rationale for maintaining bracket creep is nothing more than a flimsy excuse.
The government of Nova Scotia is telling taxpayers it cannot afford to get rid of bracket creep until the province fixes its health-care system.
Here’s the reality: the province’s health-care system will never be fixed. No matter how much money government spends or how much wait times improve, a government-run health-care system will always have kinks to work out and there will always be more to do.
The truth is Houston is using health care as an excuse to continue profiting off inflation at taxpayers’ expense.
Even Nova Scotia’s official Opposition is calling on Houston to deal with bracket creep.
Liberal leader Zach Churchill has repeatedly called on Houston to eliminate bracket creep and promised to do so himself if the Liberals win the next election.
Churchill even introduced legislation to that effect last year, although it was destined to fail because Houston’s Progressive Conservatives enjoy a healthy majority in the legislature.
Nova Scotia’s Department of Finance said indexing tax brackets would leave an additional $125 million more in taxpayers’ wallets every year.
If Nova Scotia ended its handouts to corporations, Houston could eliminate bracket creep and improve the province’s fiscal position at the same time to the tune of tens of millions of dollars.
Houston is choosing to maintain corporate handouts instead of siding with hardworking taxpayers.
Because of bracket creep, Nova Scotia taxpayers will be pummelled with a tax hike this year of up to $500 simply because Houston refuses to adjust income tax rates to inflation.
With food prices up $2,000 over the past two years, that’s a tax hike Nova Scotia families can’t afford.
As an accountant, Houston should be the first person to understand the unfairness of bracket creep. But he’s turning a blind eye to its effects to keep the cash rolling into government coffers.
Nova Scotia hasn’t changed its income tax brackets since the turn of the century. That means Nova Scotians have endured 24 years of tax hikes.
Taxpayers earning $35,000 in Nova Scotia in 2000 were sending 6.4 per cent of their paycheques to the provincial income tax man. But if they received nothing more than a cost-of-living pay bump each year between 2000 and 2023, their provincial income tax bill would have increased to 9.6 per cent of their total income.
It’s time for Houston to get in touch with the everyday challenges facing hardworking Nova Scotians and finally scrap bracket creep.
Jay Goldberg is the Ontario Director at the Canadian Taxpayers Federation. He previously served as a policy fellow at the Munk School of Public Policy and Global Affairs. Jay holds a Ph.D. in Political Science from the University of Toronto.
