Minister responds to Opposition's call for a "mini-Budget"

November 9, 1999
(Finance)

Finance Minister Paul Dicks said today that any attempt by the Opposition to compare the recommendations of the Premier's Advisory Council on the Economy and Technology (ACET) to the PC election platform are erroneous and ridiculous.

"The advisory council's recommendations, if fully implemented, would cost just over $200 million over five years," said Minister Dicks. "There is no comparison to the almost $900 million in tax cuts suggested by the Opposition in February. e are talking about modest affordable tax reductions, not the recipe for bankruptcy that was highlighted in the Blue Book."

The minister pointed out that the government rejected the Opposition's tax reduction proposal in February and rejects that proposal again now.

"The government recognizes the need for tax reform, and for that reason we requested that the advisory council undertake a province-wide consultation to provide input and recommendations. That review is now finished and we are currently studying their report, along with our own analysis," said Minister Dicks. "When we are ready to implement change, the people of this province can feel secure that those changes will be based on a more modest approach which is affordable. This government believes that our fiscal dividend should be shared with the people of this province, but in a responsible and affordable manner."

Media contact: Paula Dyke, Communications, (709) 729-0329.

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Comparison of ACET Recommendations with
Blue Book Recommendations

Estimated Impact of ACET Recommedations

	1999-00	2000-01	2001-02	2002-03	2003-04	Total
Personal Income Tax
2000 - Reduce rate from 69% to 64%	10	41	41	41	41	174
2001 - Reduce rate from 64% to 61.5%	0	5	20	20	20	65
2002 - Reduce rate from 61.5% to 59%	0	-	5	20	20	45
	10	46	66	81	81	284

Payroll Tax
- Increase exemption threshold to $400,000	0	6	6	6	6	24
- Equalize Renewable Resource rate to 2%	0	-2	-2	-2	-2	-8
Net Impact	0	4	4	4	4	16

Corporate Income Tax
- Increase M&P rate to 14%	0	-23	-23	-23	-23	-92

Total Impact	10	27	47	62	62	208

Estimated Impact of Blue Book Recommedations *
	1999-00	2000-01	2001-02	2002-03	2003-04	Total
Personal Income Tax
- Reduce rate from 69% to 64%	44	44	44	44	44	220
- Reduce from 64% to 50.4% (national average at the time)	0	30	59	89	118	296
	44	74	103	133	162	516

Payroll Tax
- Eliminate payroll tax (net of tax paid by prov. government)	42	42	42	42	42	210

Harmonized Sales Tax
- Eliminate 8% provincial portion on electricity and telephones	29	29	29	29	29	145

Total Impact	115	145	174	204	233	871

* Based on estimates done in February 1999

1999 11 09

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