New Brunswick named most tax competitive province in Canada

CALGARY, Sept. 12, 2012 /CNW/ - New Brunswick has been named the most tax competitive Canadian province in the Annual Tax Competitiveness Ranking by The School of Public Policy. Report authors Jack Mintz and Duanjie Chen analyzed the business tax regimes of the 10 provinces and ranked them based on their Marginal Effective Tax Rate (METR) on capital investment.

"The lowest METRs are in New Brunswick due to its relatively low corporate income tax rate of 10 percent, as well as the Atlantic Investment Tax Credit, which benefits the manufacturing and forestry industries," the authors write. "The highest METRs expected by 2014 are in Manitoba, Saskatchewan and British Columbia, in part due to relatively high corporate income tax rates (12 percent in Saskatchewan and Manitoba) and, more importantly, their reliance on the retail sales tax."

New Brunswick's METR for 2012 is 4.6 percent, with Nova Scotia as its closest competitor at 7.7 percent. Canada's national average is 19.9 percent and B.C. has the highest METR at 27.7. The authors argue that B.C.'s rate would have been roughly 10 percentage points lower had the province not reneged on the HST.

The report also compares the tax competitiveness of each province against all OECD countries and finds that "the four Atlantic provinces are among the most tax-competitive within the OECD, with New Brunswick having the lowest METR among all jurisdictions."

The report can be found at www.policyschool.ucalgary.ca/publications

SOURCE: The School of Public Policy - University of Calgary

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