The New Brunswick government is considering a Harmonized Sales Tax (HST) hike it says could raise up to $300 million per year.
The move would increase the HST from its current 13 per cent level back to its original 15 per cent rate when it was first established in 1997.
The province says up to $100 million of the new revenue generated by the increase could be directed to assistance for low- and middle-income households, which would help offset the impact of a higher sales tax.
“As part of our review of every line of the government’s books we have identified hundreds of millions of dollars of potential savings,” Health Minister Victor Boudreau said in a statement.
“But New Brunswickers have made it clear that they want us to consider revenue options as well.”
The federal government lowered 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 NDP government under Darrell Dexter restored its share by two percentage points, but the New Brunswick government did not follow suit.
“Most economists agree that consumption taxes like the HST are the fairest taxes to raise, especially if complemented by programs to assist lower-income households,” Boudreau said.
“Moreover, after the provincial government implemented the largest personal income tax increase in our province’s history a few years ago, there is frankly not enough room left to increase personal income taxes.”
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