Thank you.
The Nova Scotia Federation of Labour is an umbrella labour organization that has a membership made up from affiliated unions from across the province, from every region and from every walk of life. Our executive council is comprised of representation from every union in the province, and we represent approximately 70,000 affiliated members, including over 6,000 members of the Public Service Alliance of Canada.
The Nova Scotia Federation of Labour is a legislative body that represents the interests of affiliates on matters of impact on workers and their families, matters that normally cannot be resolved at the bargaining table. Taxation is one of those issues. We welcome the opportunity to raise concerns and to make recommendations on behalf of our affiliated members. We have some serious concerns about the tax system in this country and the needs for a prosperous future.
In the preamble to the questions the committee is asking, it states that the responsibility of government is to ensure the existence of a system of taxes, fees, and other charges that meets the needs of the country, its residents, and its businesses. This is an important question in the context of the committee's statement that we live in an increasingly global world characterized by ongoing and rapid change.
Globalization is one of the main reasons the federal government must ensure not just that a taxation system exists, but that it must be a fair one. The first question asked is about the criteria that should guide federal decisions about changes to taxes. Fairness is one of those criteria. Upper-income citizens and large corporations have the greatest ability to pay, and they have been the major beneficiaries of the growing economy and the tax cuts.
The Federation of Labour does not believe in tax cuts. Cutting taxes not only reduces the services Canadians depend on, it also reduces the revenue the country relies on to manage the fiscal debt and the expenditure pressures it faces.
In a recent Environics research poll, 76% of Atlantic Canadians supported increasing taxes on wealthier Canadians to pay for programs that benefit the rest of the population, while overall 70% of Canadians interviewed agreed with this statement. Any tax increases should be based on the ability to pay, and the upper-income earners and corporations fall into that category.
These assertions lead to the second question posed by the committee on the appropriate form and level of corporate taxes, fees, and other charges, and the extent to which federal revenue should be derived from corporations rather than from individuals. An appropriate form of taxation for corporations is just that—taxation, not tax breaks or cuts—and it must be based on the ability to pay. The same applies to individuals.
We do not believe the federal government needs to ensure that corporate taxation is competitive with that in other countries. It should look to the economic prosperity of those who have fair taxation and spend the money on social services and infrastructure as an example to emulate. Consideration should be given to the various levels and types of goods provided by the country only if it means we are trying to raise the bar, not lower our standards to save money.
The Federation of Labour does not believe in privatization of any public services. Public delivery of these services is the only way to ensure the quality accountability that Canadians deserve and are willing to pay for. Having said that, an appropriate form of personal taxation is fair tax based on the ability to pay.
Investment income should not be taxed at lower rates than employment income. A new and higher rate for incomes above $250,000 and an increase in the inclusion rate for capital gains for personal and corporate earnings.... We need tax reform, but not in the form of cuts. We need to tax fairly and ensure that moneys are allocated fairly to the provinces and that federal transfers are not just maintained by increases.
Concerns about the federal budget have provoked debate and scrutiny in Nova Scotia about equalization and federal transfers in general. A major concern is whether the federal budget becomes another means by which our provincial government underestimates revenues and makes cuts or eliminates important social and economic programs.