Nova Scotia Premier Stephen McNeil says he wants the other Atlantic provinces to raise HST rates to 15 per cent to reduce red tape for businesses.
“A universal harmonized sales tax of 15 percent would make it easier for businesses and goods to move among all four Atlantic provinces. I have long believed this,” McNeil said in an emailed statement.
New Brunswick and Newfoundland and Labrador each have a rate of 13 per cent, and in P.E.I. the rate is 14 per cent.
“Of course Premier McNeil wants the HST harmonized because it takes the pressure off him,” Atlantic Canada Director of the Canadian Taxpayers Federation Kevin Lacey said.
If the other provinces raised the taxes there would be less incentive for businesses in Nova Scotia to move to one of the other three Atlantic provinces.
“It wouldn’t be worth it,” Lacey said, adding that harmonizing the sales taxes would reduce some red tape, but at “significant cost to taxpayers.”
New Brunswick Premier Brian Gallant said in January he is considering raising the HST to 15 per cent. The New Brunswick government says the change would net the province up to $300 million annually.
The federal government cut the federal Goods and Services Tax from seven per cent to five per cent in 2008, effectively cutting the combined HST rate. Nova Scotia’s former NDP Premier Darrell Dexter then raised the provincial share by two percentage points bringing the combined rate back up to 15 per cent.
“Governments need revenue. This is the most fair taxation option available to us as a region,” McNeil said.
Nova Scotia has the highest HST rate in Canada, according to the Retail Council of Canada. Quebec’s rate is the second highest at 14.975 per cent.
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