Same mistake as Alberta, Canadian Taxpayers Federation warns about N.L. tax hike

With income taxesrising again in Newfoundland and Labrador, the Canadian Taxpayers Federationis concernedthe province is following a dark path.

AaronWudrick, the group's federal director,said the hikes are the fault of high government spending, which continued after the economy slumped.

"It's important to keep spending under control, even in the good times, to avoid these nasty surprises in the bad times," he told theSt. John's Morning Show. "We've seen a similar problem in Alberta. When the economy goes south but spending remains high, usually tax hikes follow."

Taxpayers in Newfoundland and Labrador will see the largest hike in the country, with all income brackets affected and the highest earners shelling out thousands of dollars more in 2017.

The largest increase will be seen in the highest bracket, where earnersof$175,700 or morewill gofrom paying 16.8 per cent to 18.3 per cent a $2,636 difference.

Aperson making $54,000 will pay $268 more, and aperson making $30,000 will pay an extra $70.

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Across the country, provincial income tax rates have remained steady, with many provinces offering rebates or repealing taxes.

"It's good news when more money is in Canadians' pockets," Wudrick said."Most families can use that money for things they need."

On the flip sideis Canada's most eastern province, mired in debt and with an expensive hydroelectric project awaiting completion in Labrador.

"If governments cannot control spending, and a few of them have shown they cannot, that sort of leads to needing to [make]hike taxes down the road to cover off expenses," said Wudrick.

• HST, gasoline and income taxes all jump in N.L. budget

The highest income earners in Newfoundland and Labrador will now shell out more than 50 per cent of their earnings in provincial and federal taxes.

Wudrick said that, and two tax hikes in the past six months, could hurtthe province's ability to attract business.

"I know a lot of folks aren't terribly sympathetic to the rich," said Wudrick. "[But] if you're not competitive, you risk losing them to neighbouring provinces, or in some cases, neighbouring countries."