HST hike will burden the poor, social justice group says

A tax credit being ushered in by the Liberals won't be enough to offset the HST hike for low-income earners, says the head of the province's Common Front for Social Justice.

The Gallant government brought down its second provincial budget on Tuesday. It promised to increase the HST by two percentage points by July 1, 2016.

But Finance Minister Roger Melanson said some families will be able to qualify for a refundable tax credit.

Jean-Claude Basque, provincial co-ordinator of the social justice group, says "it remains to be seen" whether the rebate will cancel out the upfront costs for people who live in poverty

"If you need a plumber, the service you're going to pay, you're going to pay more on that service, on electricity, on your phone," Basque said Wednesday in an interview with Information Morning Moncton.

"These are all essential services you're paying each month."

The tax credit could hand back $300 to individuals, $300 for a spouse or partner, and $100 per child under the age of 19. Single parent families can also receive a $300 credit for their first child under this new system.

The full credit will be given to a family with an income of less than $35,000 and the credit will be reduced by two cents for every dollar of income over $35,000.

Basque says he was also disappointed to see a vaguely described measure in the Liberal budget that would introduce  "reasonable, clinically sound parameters" for social development programs that provide a range of health services to low–income New Brunswickers.

"They're going to put tops on maximums on what people can get," Basque said. "We're figuring there's going to be less services available on these programs, so that's something that's certainly not positive."

Another concern was no mention of an increase for basic social assistance rates in New Brunswick, said Basque. Rates remained the same last year as well.

"So the purchasing of all these people has gone down last year, it's going down this year, the HST is going up, we know food prices are going up, electricity has gone up, so really, all these people, about 40,000 in the province, they're going to be worse off this year than last year, and worse off from the year before," he said.

"So that's really discouraging."

The Liberal budget also laid out a long list of areas where government employees were going to be cut, operations merged or services privatized.

The cutting will start inside the civil service. The number of senior bureaucrats will be trimmed by 30 per cent by March 31.

Further, the number of so-called middle managers will be cut by 30 per cent over the next five years, largely through attrition.

The finance minister said the moves will tear down unnecessary bureaucracy and also help deal with the provincial deficit.

The various moves are expected to find $46.4 million in savings.