FREDERICTON - Federal Finance Minister Jim Flaherty brought his message of low taxes to New Brunswick on Friday, promoting an agenda to brand Canada as one of the lowest corporate tax jurisdictions in the world.
Flaherty said following a speech to business representatives that he wants the provinces to reduce their corporate income tax rates to 10 per cent by 2012.
He said the federal Conservative government is promising to cut its corporate rate to 15 per cent from 22 per cent over the next five years.
"Combined with the elimination of the federal capital tax, the acceleration of cuts to small business taxes and further drops in employment insurance premiums, our government is determined to create the conditions for business to succeed,'' Flaherty said to applause from the business audience.
"Our competitive business taxes will be a powerful brand for Canada globally.''
New Brunswick's corporate tax rate is 13 per cent. Most provinces have rates that range from 12 to 16 per cent, with the exception of Alberta and Quebec, which have rates of 10 per cent.
Flaherty boasted about other tax-cutting measures, including the pending reduction of the GST from six per cent to five, effective Jan. 1.
He was asked about a proposal put forward by New Brunswick's Liberal government to increase the provincial share of the harmonized sales tax from eight to nine per cent.
Such a move would have left the HST, which combines the GST with the provincial tax in three Atlantic provinces, at 14 per cent -- effectively nullifying the federal cut.
While Flaherty refused to comment directly on the New Brunswick proposition, he said the federal Conservatives believe Canadians are still paying too much in taxes.
"We've reduced taxes of all types in Canada, including the GST, within 30 days now, and we're going to continue to reduce the tax burden for Canadians,'' Flaherty said.
"Tax policy affects economic activity and what we're seeing in Canada is continuing economic growth.''
HST to be reduced
Shortly after Flaherty's comments, New Brunswick Finance Minister Victor Boudreau told reporters the province has dropped the idea of increasing the HST.
"That's something we are no longer considering,'' he said.
"The HST will reduce from 14 to 13 per cent.''
Premier Shawn Graham wasn't able to achieve consensus with Nova Scotia and Newfoundland and Labrador on the proposal to increase the HST by one percentage point.
He said the increase would have given his Liberal government the financial room it needs to offer targeted personal and corporate tax cuts.
Flaherty was in New Brunswick as part of a cross-country, prebudget consultation.
Flaherty wouldn't give specifics when asked if the federal government is planning any additional relief for Canada's troubled forestry sector.
Forestry is the No. 1 industry in New Brunswick and the province has been shaken in recent months by major closures and temporary shutdowns in mills across the province.
Flaherty said there is already a fund to help older workers who lose their jobs in vulnerable communities, and there may be more help coming in that area.
"What we need to do is help rebuild the industry so we have a vibrant, strong forest industry in Canada in the years ahead,'' he said. "In the meantime, we need to help those who suffer job loss.''
