There was more support for the HST at this government-sponsored meeting than there had been at previous meetings sponsored by the opposition. (Brendan Elliott/CBC)

P.E.I. business owners at a government information session on the incoming harmonized sales tax said they were more likely to hire people than lower prices with savings from the tax.

About 50 people showed up Thursday in Montague for the government's first HST information meeting. This first meeting had a focus on information for business, and most of those in attendance were business owners. Unlike at earlier meetings organized by the Opposition, the mood at the meeting was in support of the new tax.

The HST will save businesses money because they won't have to pay sales tax on input costs. Ross Barnes, general manager of the Construction Association of Prince Edward Island, said Island contractors have been waiting a long time for the introduction of the HST.

"That puts them on a more competitive footing with off-Island contractors," said Barnes.

"At this point now, the off-Island contractors have a better advantage on tender prices for some of the projects that are here on P.E.I. They can bid lower because they have more money coming back to them on the tax side."

Finance Wes Sheridan said businesses tend to spread savings from HST between reinvestment, lower prices, and profits. (Brendan Elliott/CBC)

Finance Minister Wes Sheridan said Island businesses will then have three choices for what to do with the extra cash from the HST: put it in the bank, invest in their companies, or lower prices for consumers.

It was the middle option that seemed to be favoured by people attending the Montague meeting. Tara Hill-Burke and her husband run an automotive repair business in Souris, and she said there's not much chance she'll lower prices.

"I don't know if you'll see businesses lower prices," said Hill-Burke.

"My husband and I work long hours and it would be great to have an extra person do administration work, a couple of extra mechanics. It would be great to be able to afford that but right now we're not there. But it would be a nice opportunity."

Another business owner also said he would hire more staff before he'd lower prices. Sheridan said the evidence in other provinces with the HST shows businesses take their new-found money and place a little bit in each of the three areas.

The HST will come into effect April 1, 2013, but there is still some confusion about how that deadline will apply.

Barnes said Island contractors are already starting to bid on contracts for next year, and he wanted to know how Island businesses should prepare bids for jobs that start before the HST comes in, but finish after the HST is implemented.

Finance Department officials told Barnes they're still working on that and will have an answer shortly.

The next HST meeting, next Wednesday in Charlottetown, is geared toward consumers.