HST will hit electric heat hard

Prince Edward Islanders who use electricity to heat their homes will be paying a lot more to keep out the winter cold after the introduction of HST in 2013.
Darcie Lanthier calculates the HST will mean another $240 a year on her electricity bill. (CBC)

Prince Edward Islanders who use electricity to heat their homes will pay a lot more to keep out the winter cold after the introduction of HST in 2013.

Home heating oil will be one of the few articles exempt from the provincial portion of the HST when it comes into effect April 1, while electric heat will be hit with the nine per cent provincial portion of the HST.

Finance Minister Wes Sheridan said he expects the base price of electricity will fall before next April, mitigating some of that impact. But Darcie Lanthier, who heats her home with a combination of oil and electric, is worried she will pay a lot more.

Based on last year's prices, another nine per cent on her electricity bill will cost her $240 a year. That has her upset, but it's just one of the reasons she's against the HST.

"The more I look into it, the more I feel it's a punishment for the people who have the least," said Lanthier.

If Lanthier lived in Nova Scotia, her heating bills wouldn't be taxed by the province. Nova Scotia exempts every form of household energy from its 10 per cent provincial portion of the HST: electricity, even firewood, which will be subject to the HST here.

No incentive to change

Environmental groups are also concerned that the exemption for oil provides an incentive for people to continue heating their homes with oil.

Electric bills will go up with HST, but heating oil bills will not. (CBC)

Sierra Club executive director John Bennett said P.E.I. should look for ways to move people to alternative home heating methods.

"By taking HST off home heating, you're encouraging people to continue to use that energy inefficiently," said Bennett.

"Instead you [should] take that money and invest it by helping those people reduce the amount of heat they need."

Lanthier said no incentive will get her behind the HST. She said if and when Islanders start protesting, she'll be one of them.

New prices with the HST

The CBC's Kerry Campbell worked with Darcie Lanthier to go over some of her expenses, and look at what they might be after April 1, 2013, when the HST is introduced on P.E.I.

In general, products that currently have PST applied will see the price go down, because the total tax will drop from 15.5 per cent to 14 per cent. Products losing their provincial exemption will go up in price.

Here is what they found:

Regular purchases
Item Current cost Cost with HST Difference
Electricity $357.36 $387.99 +$30.63
Phone/Internet $115.33 $113.83 -$1.50
Clothing (adult) $210.00 $228.00 +$18.00
Books $52.50 $57.00 +$4.50
Yoga Membership $157.50 $171.00 +$13.50
Restaurant meal $92.40 $91.20 -$1.20
Cleaning supplies $23.10 $22.80 -$0.30

Occasional Purchases
Item Current Cost Cost with HST Difference
Greenhouse $808.50 $798.00 -$10.50
New Car $23,100.00 $22,800.00 -$300.00
Small appliance $46.20 $45.60 -$0.60
Large appliance $1,270.50 $1,254.00 -$16.50