Chamber disappointed in gradual approach to tax cuts

The Greater Charlottetown Area Chamber of Commerce says it is disappointed the promised cut to the small business tax rate will likely be phased in gradually.

During the April election campaign the P.E.I. Progressive Conservatives promised to lower the small business tax rate from 3.5 to one per cent by January.

Now, Premier Dennis King says given the minority government the tax decrease will probably be brought in over a couple of years.

He said instead of seeing a full-point reduction in tax in the budget this year, there will probably be a half-point reduction.

"Currently the P.E.I. small business tax rate is the highest in the region and second highest in the country. The proposed 0.5 per cent reduction won't change this position for P.E.I. small business owners," said Penny Walsh-McGuire, CEO of the Greater Charlottetown Area Chamber of Commerce.

Need for compromise with minority government

Walsh-McGuire said the chamber realizes the need for compromise in a minority government situation, but she notes that all three sitting parties had made promises when it comes to tax cuts for small businesses.

The PCs promised to lower the rate by 2.5 per cent, the Liberals pledged to drop it by 1 per cent and the Greens by 0.5 per cent.

"We would have liked to see the reduction land somewhere more in the middle of that compromise," she said.

"The reduction in small business tax is truly an investment. It is really, you know, an opportunity for provincial revenues to grow when those dollars are reinvested in businesses and in the economy."

Chamber optimistic about tax reduction

She said despite the more gradual approach, the chamber is optimistic that P.E.I. will see a more supportive tax environment for small business owners.

"However, we do continue to stress the importance of a competitive business environment." 

She said with a minority government, the chamber has to have ongoing dialogue with all the parties in the legislature.

More P.E.I. news