NDP Leader Darrell Dexter promised to raise the Nova Scotia Equity Tax Credit from 30 to 35 per cent Monday, a promise that would cost the province $1 million.
He made the announcement at Jane’s on the Common, a north end Halifax restaurant whose owner, Jane Wright, benefited from the tax credit when she began her business.
“The Equity Tax Credit is helping other entrepreneurs write their own inspiring stories,” Dexter said. “But we’ve got to do more in an economic climate where it has become harder to gain traditional investments, especially when jobs must be a priority.”
Introduced in 1994, the program currently offers a 30 per cent tax credit for small and medium sized Nova Scotia businesses, and a second 20 per cent credit if they invest again after five years.
Dexter said the tax credits leveraged almost $19 million of new capital for Nova Scotia businesses in 2006.
“The program is to try to get people to invest in a Nova Scotia company rather than, say, buy stocks of a company on Bay Street in Toronto,” Wright said. “It worked well. I raised money and I was able to open a business with no debt.”
Compared to business owners who didn’t invest, the NDP say startup companies who used the tax credit had a higher survival rate.
But Liberal Leader Stephen McNeil said the NDP should instead support his tax reduction plan, which would provide a broad cut to all communities and drop the small business tax rate to one per cent from five.