When is progressive regressive?

"New Brunswick Finance Minister John Baxter pulled something out of a hat for the mining industry in April, but there is a general concensus in the industry that he should put II back where it came from.The industry has never been in the mood f or progressive rate structures, but that is exactly what New Brunswick 's 1984 budget offers to this depressed sector of the economy.IntroductionThe Province of New Brunswick stunned the Canadian mining community in April with the announcement that the province' s 16% mining tax rate would be replaced with a progressive rate structure effective January 1, 1984 (Table I). The proposed change, contained in the bud get papers tabled by Finance Minister John Baxter on April 17, caught the industry totally by surprise. The move to a progressive rate structure was completely unexpected for a variety of reasons:• Generally speaking, relations between the province and the industry have been relatively good, yet the industry was apparently not consulted with respect to the proposed measure and had no indication that a change of th is nature was coming. This is in stark contrast to the mood which prevailed during the major revamping of the province' s mining tax regime in 1977: at that time, the industry was invited to contribute in advance to the province's plan for a new tax structure.• The new structure would appear to make th e province less competitive in terms of mining tax rates with Ontario , Quebec, and other provinces, despite indications in the past that New Brunswick is very cognizant of this competitive factor in formulating mineral policy.• A joint report in November 1978 by federal and provincial officials to federal and provincial finance and resource ministers, which was careful not to directly criticize Ontario and Quebec's progressive mining tax rate structures, recommended that provincial "" tax regimes be examined to ensure the inclusion of appropriate mechanisms to avoid the excessive taxation of cyclical type profit "" , and that ""the federal and provincial governments consider the concern over progressive tax regimes expressed by the industry and examine mining and royalty tax regimes and the income tax regime with a view to alleviating the effect of such regime on the aggregate marginal tax rate"". In this context, any move to a progressive rate structure would be viewed by many observers as retrograde."