Alward open to HST referendum before 2014 election

Premier David Alward said at a news conference Wednesday the province could hold a referendum on an increase in the harmonized sales tax before the 2014 provincial election.

HST increase could reap $270M in added revenue

Premier David Alward talks to reporters about the idea of a referendum on increasing the HST 1:58

Premier David Alward said at a news conference Wednesday the provincial government could hold a referendum on an increase in the harmonized sales tax before the 2014 provincial election.  

Finance Minister Blaine Higgs raised the possibility of asking citizens to vote on whether to increase the HST and impose highway tolls as a way to reduce the budget deficit in an interview on Monday. 

Those two initiatives could bringing in $300 million in new revenue for the provincial government.

Suggestions from Department of Finance

Estimated amount saved to help pay down deficit

Rescind previous personal income tax cuts$320M
Rescind previous corporate income tax cuts$25M
Increase HST two percentage points$270M
Increase gas/tobacco taxes or other consumption taxes$40M
Impose highway tolls$30M
Impose a health levy$115M  

In the past, the premier has suggested such a vote would take place at the same time as an election, in an effort to save money. 

The thinking on a referendum has always been to hold one simultaneously with an election, to avoid the cost of polling stations and returning officers.

The premier says it's all hypothetical and will depend on how public consultations go. But for the first time he's floating a timeline for a toll and tax referendum — in the next year and a half.

There have also been suggestions to impose a health-care levy as a way to fund the system but Alward said that idea hasn't come up as often as other revenue-generating ideas. 

"The question of the health levy was actually raised by New Brunswickers. I would say however that there are other sources of revenue that have been more frequently brought forward," said Alward.

The province's projected deficit is $356 million, almost double the amount Higgs projected last March.   

The people of New Brunswick have made several suggestions to the provincial finance department on ways to ease financial pressure the deficit has put on the province.

Higgs is in the middle of his pre-budget consultation tour, where he is outlining these suggestions, such as hiking the HST, adding road tolls or imposing a health levy.

The health levy concept could bring in $115 million, while raising personal income taxes to levels under the former Liberal government could raise $320 million.

No support for cuts

After two years of talking about reducing government spending, Higgs said there isn't public support for the additional cuts he would need to make to balance the budget.

Finance Minister Blaine Higgs raised the possibility Monday of asking New Brunswickers to vote on whether to increase the HST to help (CBC)

So he's now looking for more revenue and is suggesting New Brunswickers will get a say on two of the most lucrative options.

The Alward government has often dismissed the idea of a sales tax hike or road tolls.

"We will not raise the HST," Alward had said early in his mandate.

"My last option is to raise taxes in New Brunswick."

But Higgs now said he and the premier are not ruling out the idea.

The law requires that a referendum be held on either an HST increase or tolls.