Nova Scotians brace for HST hike to 15%
Shoppers in Nova Scotia will be digging a little deeper starting Thursday because of a two percentage point hike in the province's harmonized sales tax.
The tax increase, which brings the HST to 15 per cent, has drawn outrage from opposition politicians but the government says it needs the increase in revenue to help fight its burgeoning deficit.
The increase in the provincial portion of the tax — from eight to 10 per cent — helps make Nova Scotia one of the highest taxed jurisdictions in the country.
Prince Edward Island has a 10 per cent sales tax and the five per cent federal GST, but those levies apply to a narrower range of items than in Nova Scotia.
Tax-exempt items in Nova Scotia include feminine hygiene products, children's clothing and shoes, and diapers.
The tax increase was announced in the NDP government's spring budget and is expected to bring in an additional $214.8 million in 2010-11.
While many people told the CBC they were unhappy about the increase, others said they understood.
"I guess you have to be conservative about how you get the deficit under control and it's been a successful tax. So I don't like it, but I don't like the deficit either," said John Blake.
Liberal finance critic Leo Glavine describes the increase as a "tax grab."
"There is no doubt that an increase in the HST will harm our still recovering economy — the cost of doing business in Nova Scotia just got more expensive," he said in a statement.
But Finance Minister Graham Steele said the tax increase is necessary because of the province's financial situation.
"We are dedicated to getting our province back to balance," he said in a release. "I'd like to thank Nova Scotian retailers for their understanding and co-operation while we take on the hard work to start living within our means."
Glavine said he is concerned about business on the boundary with New Brunswick.
"By increasing taxes, the NDP are encouraging Nova Scotians in border communities to take their spending money elsewhere," he said.
A 12 per cent HST begins Thursday in British Columbia, while a 13 per cent HST starts in Ontario, merging the federal and provincial sales taxes.
With files from The Canadian Press