Nfld. & Labrador

HST hike could be off table if oil stays high, Paul Davis says

A hike to the provincial HST could be off the table if oil prices remain higher than original projections, says Newfoundland and Labrador's premier.
Newfoundland and Labrador Premier Paul Davis says he will reconsider a proposed increase to the province's HST rate if oil prices remain higher than original projections, but says he can't guarantee anything yet. (CBC)

Newfoundland and Labrador Premier Paul Davis told CBC News he may rethink a hike in the provincial HST rate if the price of oil stays high.

Oil has been rebounding from low projections in recent weeks, higher than where it was around the time government released its budget.

Davis said during a taping of CBC's On Point with David Cochrane if the higher prices continue, the two-percentage point HST increase his government outlined in the budget could be taken off the table.

"HST was a tough one for us, as well, but I wouldn't be isolated to HST because there's other parts of our budget," he said.

"If we had a chance, because if oil continues in that direction, if we have a chance to revisit some of those I'd be willing to do that."

However, he said it's early in the year to make a promise on the HST since oil prices could change.

"We're very early in the year so we have to be very, very cautious on that," said Davis.

"But if that trend was to continue then that's going to have an impact on our finances and on our budget and it gives us some flexibility."

If government does in fact decide to cancel the increased HST rate, the province would have to provide a period of notice to the federal government, which means a decision would need to be made in early fall.

The new HST is currently set to take effect in 2016.

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