Big tax cut in Nova Scotia

Photo: Twitter

Nova Scotia Premier Stephen McNeil, left.

A program that reduces taxes by an average of $160 for half a million low- and middle-income earners in Nova Scotia has come into effect, with Premier Stephen McNeil calling it the largest tax cut in the province’s history.

McNeil says the tax cut, which took effect on Jan. 1, will impact half of the province's population by increasing the basic personal exemption on a sliding scale up to $3,000 for taxable income up to $75,000.

The premier says 63,000 of the lowest income Nova Scotians will no longer pay provincial income tax under the new regime, while those earning more than $75,000 will pay the same rate as before.

He says the program will have an $85-million impact on the province, with benefits weighted towards low- and middle-income earners, but he believes their increased buying power will lead to growth across the wage scale.

The Liberal government floated the tax cut last April as part of a surplus budget in the run-up to a provincial election, which McNeil then touted as proof his fiscal restraint on public sector wages would lead to direct benefits for taxpayers.

At the time, the president of the Nova Scotia Teachers Union said the tax cut was coming at the expense of students and teachers.

McNeil says he doesn't believe his government sacrificed any salaries to fund the tax cut, and says public sectors workers in Nova Scotia have seen a modest wage increase when other provinces are rolling them back.