by Neville Gilfoy

Prior to 2000, the corporate tax rate in Atlantic Canada was one of the highest in the Western world. Provincial and federal taxes combined on profits greater than $200,000 hovered around 45%.

The $200,000 cap was established in the early 1970s and hadn't changed until the Atlantic Provinces Chambers of Commerce lobbied the Atlantic Liberal Caucus in 2000. That year's federal budget saw the cap raised to $300,000-phased in over five years-but benefiting the entire country.

In its March 2009 provincial budget, the government of New Brunswick raised the cap from $400,000 to $500,000 (the provincial tax rate is 5%) and announced a reduction of the rate on income above $500,000 from 13% to 8% over the next five years.

Once the phase-in is complete, New Brunswick will have the lowest corporate tax rate in Canada. Combine that with the increase in the maximum eligible amount for the investment tax credit (and the broadening of the eligibility criteria), and in five years New Brunswick will have one of the most attractive tax regimes in North America.

What will this mean to New Brunswick companies? More capital left on the balance sheets to invest in training, R&D, productivity, competitive compensation standards, and social and cultural contributions.
On a higher plane, it could mean that New Brunswick would become known throughout the world as a great place to grow a business and to prosper. Not a bad brand.

Disconcertingly, the excitement and momentum that should be gaining velocity by now are nowhere in evidence. This exceptional opportunity has been created but no one is talking about it and none of New Brunswick's counterparts seems to be provoked by the leadership of this initiative.

The change in tax regime is significant and it won't be believed or even recognized if the guys in charge don't get in the market and sell it. Premier Graham and his key ministers need to take their story across the region and around the world. Get people excited. Create buzz.

To not own this initiative allows other jurisdictions to replicate the legislation and beat New Brunswick to the market. Here's a suggestion: forget the whiners, the naysayers, and the cranky media. Get on a plane and go sell this opportunity to the world. Who knows, maybe the other three provinces will follow your lead.