Tax Cuts and HealthCare Spending
Tables 1 and 2 summarize the estimated 2005-2006 revenue losses from provincial corporate and personal income tax cuts established in provincial budgets between 1995 and 2002 in absolute dollars and as a percentage of actual provincial government revenue in 2005-2006.
Table 1: Corporate Income Tax Cuts
| Impact of cuts to 2005-6 (millions of dollars) | 2005-6 actual revenue (millions of dollars) | Relative impact of cut | |
| Newfoundland and Labrador | 0 | 198 | 0.0% |
| Prince Edward Island | 2 | 38 | 5.3% |
| Nova Scotia | 0 | 363 | 0.0% |
| New Brunswick | -73 | 165 | -44.2% |
| Quebec | -1,099 | 3,667 | -30.0% |
| Ontario | -3,978 | 8,296 | -48.0% |
| Manitoba | -81 | 352 | -23.0% |
| Saskatchewan | -39 | 393 | -9.9% |
| Alberta | -565 | 4,278 | -12.0% |
| British Columbia | -461 | 1,570 | -29.4% |
| TOTAL | -6,294 | 19,770 | -31.8% |
Sources: Income tax cuts, by province, budgets between 1996 and 2002 –annual revenue loss, unpublished data, Finance Canada, October 2002. CANSIM Table 385-0001, Statistics Canada, 2010.
For example, Table 1 shows that in British Columbia, corporate income tax cuts introduced in budgets between 1996 and 2002, when fully implemented, reduced the province’s revenue in fiscal year 2005-2006 by an estimated $461 million. That cut represents 29.4% of the province’s actual fiscal year 2005-2006 revenue from corporate income taxes.
Table 2: Personal Income Tax Cuts
| Impact of cuts to 2005-6(millions of dollars) | 2005-6 actual revenue(millions of dollars) | Relative impact of cut | |
| Newfoundland and Labrador | -62 | 821 | -7.6% |
| Prince Edward Island | -22 | 205 | -10.7% |
| Nova Scotia | -241 | 1,565 | -15.4% |
| New Brunswick | -269 | 1,080 | -24.9% |
| Quebec | -5,395 | 19,527 | -27.6% |
| Ontario | -12,129 | 24,291 | -49.9% |
| Manitoba | -411 | 1,941 | -21.2% |
| Saskatchewan | -673 | 1,449 | -46.4% |
| Alberta | -2,210 | 2,889 | -76.5% |
| British Columbia | -2,744 | 5,943 | -46.2% |
| TOTAL | -24,155 | 59,711 | -40.5% |
Sources: Income tax cuts, by province, budgets between 1996 and 2002 – annual revenue loss, unpublished data, Finance Canada, October 2002. CANSIM Table 385-0001, Statistics Canada, 2010.
Table 2 shows the estimated annual revenue loss in fiscal year 2005-2006 from personal income tax cuts implemented in budgets between 1996 and 2002. For example, New Brunswick’s personal income tax cuts introduced between 1996 and 2002 reduced the province’s personal income tax revenue by an estimated $269 million in 2005-2006 as compared with actual 2005-2006 personal income tax revenue of $1,080 million.
