Kevin Lacey of the Canadian Taxpayers Federation said Premier David Alward should call a referendum on increasing the HST (CBC)

A leading tax critic in the region is calling on Premier David Alward to hold a referendum on increasing the harmonized sales tax and imposing highway tolls.

Alward and Finance Minister Blaine Higgs have been talking openly about the possibility of a referendum on hiking the HST by two percentage points this week.

Kevin Lacey, the Atlantic director of the Canadian Taxpayers Federation, said the Alward government has been musing about the idea for long enough.

"The province has been dragging taxpayers through this debate for the last three years. It's time for them to make a decision one way or another,” Lacey said.

“If we have a referendum, let's do it and make decision one way or the other."

By law, highway tolls or a sales tax increase has to be approved by voters in a referendum or a provincial election.

Alward tried to slow down speculation on a referendum on Thursday. He said a public vote is just one option that could be considered by his government to get control of the deficit.

"The question of the referendum is very hypothetical,” he said.

The premier said because a vote is logistically feasible, it doesn't mean he's going to do it.

"So I just would encourage people to not put the cart ahead of the horse,” he said.

The New Brunswick government would reap $270 million if it increased the HST by two percentage points.

A two-percentage-point increase would put the tax rate back to the level before Prime Minister Stephen Harper reduced the sales tax.

Higgs is estimating the deficit will be $356-million this year, which is almost double the amount he forecasted in his budget last March.

The finance minister said provincial revenues are continuing to decline and that is prompting the discussion on new ways to raise money.

In his pre-budget meetings, Higgs has raised a number of revenue-raising ideas that he says have been mentioned by taxpayers.

A health levy could raise $115 million and rescinding the former Liberal government’s personal and corporate income tax cuts could raise $320 million and $25 million, respectively.

The New Brunswick Business Council has already come out in support of increasing corporate income taxes and boosting the sales tax.

Meanwhile, Lacey said he welcomes the idea of a HST referendum because he thinks New Brunswickers would vote down higher taxes.

If there is a HST referendum, Lacey said he also thinks it would be wise for the provincial government to hold Senate elections on the same day at no extra cost rather than wait until 2016, as the current plan foresees.

"Certainly this way it would allow New Brunswickers not only to have a say on their taxes but on who represents them in the Senate. It would save money and it's a good idea,” he said.