Sask NDP leadership candidate Erin Weir responds to Premier Wall’s “Plan for Growth”
"But economist and NDP leadership candidate Erin Weir noted that of the eight provinces where manufacturing sales rose from July to August, Saskatchewan had the second-lowest percentage increase.
He added that manufacturing employment in the province is continuing to fall from 32,000 in November 2007 to 26,500 in September 2012. “While Saskatchewan manufacturing sales have been increasing, our province has lost 5,500 manufacturing jobs since the Sask. Party took office,’’ Weir said.
NDP leadership candidate Erin Weir responds to Premier Wall’s “Plan for Growth.”Economist and NDP leadership candidate Erin Weir attended the Premier’s speech in Saskatoon today and responded as follows:
Corporate Tax Breaks
The Premier promised to cut Saskatchewan’s corporate tax rate to 10% from 12%. Given that the current 12% is projected to collect $900 million (First Quarter Financial Report), a 2% cut represents a $150-million giveaway to profitable companies.
Deep corporate tax cuts federally and in other provinces have failed to spur business investment. A far more effective approach would be tax credits and rebates directly linked to investment and hiring, as I have proposed.
When an American company like Mosaic repatriates profits from Saskatchewan to the US, it pays the 35% American federal corporate tax rate minus a credit for corporate taxes paid in Canada. The combined federal-Saskatchewan rate is currently 27% (12% + 15%), well below the US threshold. Cutting Saskatchewan corporate taxes further below that threshold would force US companies operating in Saskatchewan to pay more American tax, shifting revenue from our provincial treasury to Washington with no benefit for Saskatchewan.
I agree with the Premier’s stated goal of repaying debt and saving for the future, but he has not presented a revenue plan to achieve that goal. Cutting corporate taxes and maintaining loopholes in Saskatchewan’s resource royalties will reduce revenue and slow the repayment of provincial debt, further delaying Wall’s still-undefined “Heritage Initiative.”
I agree with the Premier that we need more investment in public infrastructure, but public-private partnerships are not the right way to finance such investment. Wall bragged about Saskatchewan’s AAA credit rating, which means that the provincial government can finance capital investments at very low interest rates. Why pay private operators more to finance infrastructure at much higher interest rates?
The Premier mused about a new bridge in Prince Albert, which is urgently needed to improve access to northern Saskatchewan. However, Wall failed to clearly commit to building a new bridge across the North Saskatchewan River.
Originally posted at Saskatchewan New Democratic Leadership Blog ...