By Stephen Pate, NJN Network, Charlottetown, PEI, Canada, January 30, 2009
with stories from The Toronto Star and The Guardian
Federal Finance Minister is waving the perennial HST flag asking the provinces to sign onto a blended provincial and GST tax system. Ontario Finance Minister Dwight Duncan said the HST would cause Ontario’s gross domestic product to decline. However business groups in Ontario are lobbying for the change since businesses can claim a net refund on taxes paid. Essentially what HST does is shift the tax burden to consumers.
PEI’s Treasurer Wes Sheridan is on record as opposed to the HST. PEI exempts necessities of life such as food, heating fuel, electricity, children’s clothing, property rental, clothing, foot ware, medical appliances and a host of other items. Farming, fishing and manufacturing equipment are also PST exempt.
Ask any Island mother and she can list the things for the family that are cheaper on PEI compared with Moncton. Island stores enjoy a 10% price advantage for clothing over their NB counterparts.
Wes Sheridan has wisely ignored the pleas of Ottawa to harmonize which are primarily driven by business interests. We don’t seem to lack new businesses on PEI. The Guardian carried 28 comments today on their story, 3 of them from Garth Staples who has the uncanny knack for getting on the wrong side of every issue.
Most of the writers agreed that taxing essentials like heating oil and electricity would be bad for PEI. For the poor and working poor it would be devastating. The current lull in oil prices is predicted to end in 2010 when $1.50 a litre and higher will return for the rest of our lives. We don’t want to get fooled into making heat and lights cost 10% above that.
Only four provinces already use the HST: Quebec, New Brunswick, Nova Scotia and Newfoundland. Alberta has no provincial sales tax. Ontario appears to be saying no thanks and PEI should stay the course as well. Businesses make money under any tax scheme since they have all the advantages already.
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