As provincial governments prepare their spring budgets, one Maritime premier is calling for a common harmonized sales tax across Atlantic Canada.
Nova Scotia Premier Stephen McNeil says it would make it easier to do business in the region and Finn Poschmann, president of the Atlantic Provinces Economic Council, agrees a common tax rate would make sense.
“We want to knock down barriers to doing business across our provincial borders and tax differentials are one of those barriers,” said Poschmann.
However, the response from other Maritime provinces has been lukewarm.
Prince Edward Island’s HST is 14 per cent while New Brunswick’s is 13 per cent. The New Brunswick government is considering an increase this year, in the face of a $453-milion deficit, but the finance minister won’t confirm anything before the budget is released Tuesday.
“When you look at taxation and fiscal policy, you’ve got to look at it from competitive advantage, or at least a level playing field, and it was interesting, the comments that the premier of Nova Scotia made,” said Roger Melanson on Jan. 26.
As for P.E.I., a spokesperson from the province’s Department of Finance says the government has just begun its annual pre-budget consultations, saying “it would be unfair to Islanders to speculate about what will be in the 2016-17 budget until that process is complete.”
McNeil has said he would consider lowering Nova Scotia’s HST, which is 15 per cent.
“If someone wants to tell me another number we can have that discussion, but I’ve made that pitch to my Maritime and Atlantic colleagues,” he said Jan. 27.
But Kevin Lacey, the Atlantic director of the Canadian Taxpayers Federation, says once the sales taxes are unified, it will be difficult to go back, and provinces won’t have any incentives to lower taxes.
“The amount of red tape you would reduce would not be worth the increase in taxes that this would cause,” said Lacey. “One of the reasons our economy is in the state that it’s in is because we have these high, high taxes that make it difficult for us to compete.”
Newfoundland and Labrador HST was supposed to go up to 15 per cent in January, but the motion was cancelled.
With all three Maritime provinces preparing their spring budgets, it’s possible Maritimers could see HST rates at the same level, even without collaboration between provinces.
With files from CTV Atlantic's Sarah Ritchie