Corporate tax rebate touted as key PC election promise still needs 'considerable analysis'

When Tim Houston was campaigning for the job he now has, the PC leader introduced a "better paycheque guarantee," but if or when companies will be offered a rebate on their corporate taxes remains unclear.

Kelliann Dean, the province's deputy minister of finance and Treasury Board, told a legislature committee Wednesday the proposal remains "a stated mandate priority and something our department will look at as we plan our work over the next couple of years."

"It's part of our work plan to look at that," said Dean.

The proposal is to give Nova Scotia companies a 50 per cent rebate on their provincial corporate taxes, if they use those savings to pay their employees more. The promise made the cover of the party's election platform, which included the suggestion it would be done soon after gaining power in August 2021.

"Creating jobs, increasing wages and bringing more businesses to Nova Scotia; starting right now," the platform's cover trumpeted.

$200M price tag

In the mandate letter Houston sent Finance Minister Allan MacMaster on Sept. 14, 2021, the corporate tax rebate plan was the second item on the deputy premier's to-do list.

"Implement the better paycheque guarantee," Houston's letter noted. "Whatever is paid in provincial corporate tax, as a five-year pilot program, the province will return 50 per cent of it to the corporation the next year as a subsidy, provided it is paid to their employees in accordance with the program."  

It's estimated the measure could cost the province $200 million in revenue.

Speaking to reporters after Wednesday's meeting, Dean said "considerable analysis" was needed to determine what the rebate would look like and how it would be implemented.

"It is an area of priority, but they all can't be done at once. This is one that is going to take us some more consideration, some more analysis," said Dean. "We're committed to doing that, and as soon as that is done and government makes a decision, we'll have further information on that."

No timeline on formal proposal

Dean said work on the guarantee took "a backseat" to tax measures that were part of the PC government's first budget. They included a tax cut for people younger than 30 working in the trades, and tax credits for fertility treatment and surrogacy.

"We've had some initial work done on it, but we have not finished the analysis that we're going to need to do in order to make a recommendation," said Dean, who could not predict when a formal proposal might be ready to go before cabinet.

Liberal public accounts member Brendan Maguire said businesses should not bank on the tax cut.

"I don't have a lot of faith," Maguire told reporters. "It's not going to happen."

The MLA for Halifax Atlantic cast doubt on the central goal of the plan: to increase the wages of Nova Scotia workers.

"When is the last time the company they worked for had their taxes cut and their profits raised and that trickled down to them?" asked Maguire. "It's trickle-down economics.

"It hasn't worked since the '70s and '80s, and it's not going to work in 2022."