University of Calgary professor Jack Mintz says P.E.I. will benefit from instituting the HST. (CBC)

P.E.I. will reap huge benefits by switching to the harmonized sales tax, says a professor from the University of Calgary.

Jack Mintz, an expert on tax law and public policy, was on the Island Friday to discuss his study of the HST with the Island business community.

His study, commissioned by Innovation PEI, predicts P.E.I. businesses will reinvest $560 million into the local economy in the first seven years after the province switches to the 14 per cent tax next April.

He also predicts $380 million of that investment will be in the Island workforce, resulting in higher wages, more jobs or a combination of both.

These economic spinoffs are a result of the nine per cent tax rebate businesses will receive on everything they buy under the HST.

But the study does not delve into potentially negative impacts of the tax, including the province's intention to apply it to items currently exempt from provincial sales tax, such as electricity.

Mintz said the switch will make P.E.I. businesses more competitive, by giving them the lowest effective tax rates in Canada.

The findings were presented at a meeting of the Charlottetown Chamber of Commerce.