PEI

Proposed HST hike gets little traction on P.E.I.

There are conflicting opinions about whether the PEI government should raise its HST, after N.S. Premier Stephen McNeil floated the idea of the Atlantic provinces adopting a common 15 per cent HST.

"There's been no decisions made on anything to this point' says P.E.I. Finance Minister

Allen Roach, P.E.I.'s finance minister, says there's been no talk of a unified HST hike at this point. (CBC)

There are conflicting opinions about whether the P.E.I. government should hike the HST from 14 to 15 per cent, but P.E.I. Finance Minister Allen Roach has made it clear he's not committing to the idea. 

On Wednesday, Nova Scotia Premier Stephen McNeil ignited the debate on the adoption of a single harmonized sales tax of 15 per cent for all of Atlantic Canada.

"There's been no decisions made on anything to this point ... there's been no talk about it at this point," said Roach. 

Opposition finance critic Darlene Compton believes raising the HST would hurt Islanders. (CBC)

"Again that would be presupposing what we're going to hear from Islanders and I won't do that. I want to hear from Islanders first," said Roach.  

Roach plans to deliver a balanced budget this spring and will to do that by getting spending under control, he said. 

Darlene Compton, P.E.I.'s Opposition finance critic, said the government needs to be clear with Islanders about any plans for the HST. 

Raising the HST would hurt Islanders by taking more money out of their pockets, Compton believes.  

"You know, the increased cost of food, the cost of living, the fact we've got a number of people home from the west without jobs ... Islanders cannot afford it," she said.

The Canadian Federation of Independent Business on the Island is also speaking out against the idea of a 15 per cent HST.

"Certainly consumers took a really big hit when [the HST] was implemented a few years ago," said federation executive director Erin McGrath-Gaudet.

Finn Poschmann of APEC says there is "a lot to be said" about a unified HST rate. (APEC)

"To ask for more money out of the economy right now would be really troublesome for the economy as a whole."

Others argue it makes sense for provinces to rely on sales taxes for revenue and there is "a lot to be said" about a common HST said Finn Poschmann, president and chief executive officer of the Atlantic Provinces Economic Council.

"It helps the government balance its books and avoid debt from growing, and all of us are on the hook for the debt that our governments incur," says Poschmann. 

APEC said in its annual report an HST increase would be positive for the Island, allowing the province to index its income tax rates to inflation to stop so-called bracket creep.

Jim Sentance, an economist at the University of Prince Edward Island, estimated that with a hike of just one per cent in the HST, the P.E.I. government's revenues would increase by $28 million.

The government's next pre-budget consultation is scheduled for Feb. 4 in Summerside.

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