HST will increase revenues on P.E.I., APEC says

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HST

The implementation of the harmonized sales tax on P.E.I. is expected to take a bit of the sting out economic weakness that is expected to hit the region.

The Atlantic Provinces Economic Council issued a news release this week saying ongoing economic weakness continues to weigh on the region’s fiscal prospects.

All four Atlantic provinces are forecasting an increase in current year deficits and three of the four of the four anticipate delays in returning to fiscal balance.

“Economic weakness is contributing to lower revenues and increased fiscal deficits this year,’’ said APEC president Elizabeth Beale, who noted that all four Atlantic provinces increased their projected deficits by a combined $712 million in their fall fiscal updates.

In addition, the federal government revised its projected deficit upwards for 2012-13 by $5 billion.

However, APEC’s Atlantic Report, which was released on Wednesday, noted that the HST is forecast to increase revenues on P.E.I. by $25 million.

It’s also expected to pump $4 million back into the pockets of Island farmers since it will put those in the agriculture sector on a level playing field with everyone else in the region.

Beale said the region’s economic weakness is also leading to delays in returning to fiscal balance. The federal government is now planning to return to balance by 2016-17, one year later than planned in Budget 2012.

Nova Scotia is currently maintaining its commitment to return to balance in 2013-14 with the three other Atlantic provinces forecasting balanced books by 2014-15.

“Facing wage and other spending pressure, provinces will need to be vigilant in ensuring previously announced spending restraint is achieved,’’ Beale said. “Measures to restrain spending are underway at the federal level and in most Atlantic provinces.’’

Beale also highlighted that changes to a number of federal transfer programs could affect Atlantic Canada in 2014. These include the expiry of labour market agreements and the Building Canada Plan, along with changes to the Canada Health Transfer.

Organizations: APEC, Building Canada Plan

Geographic location: Iceland, Nova Scotia, Atlantic Canada

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Recent comments

  • AboutTheGreen
    February 25, 2013 - 18:50

    hmmm... typical spin... call the $25M in additional taxation - increased revenue... APEC, you might want to check with your accountants as to what exactly constitutes 'revenue'...

  • Just saying
    February 25, 2013 - 16:11

    Just look at BC one more time. HST in, business wins, consumer pays....looks good for business and APEC and people with these jobs that tell us how well off we will be. HST kicked out of BC....business complains...consumers win. Good luck out east, you're going to be poorer than you think, no matter what these stories spin.

  • don
    February 25, 2013 - 10:27

    REALITY CHECK. those years you stated that we had extra money all but one had the PC party and in 84 was liberal. check it out as to what leaders we had that made money and who lost us money. http://www.gov.pe.ca/premiersgallery/index.php3 but dizzy jr is trying to be better then his father well his dad was no good as leader so how can dizzy be better he learned to to treat the people as SLAVES.

  • Jon
    February 24, 2013 - 23:00

    My hope is, at least the gov MIGHT use the money to benefit us... at least a little... maybe fix more roads and make my job as a driver more comfy?

    • graduate
      February 25, 2013 - 16:59

      Yes invest in the hills of Borden ,this will make your driving better.

  • William White
    February 24, 2013 - 17:07

    It will wreck the service industry, Mr. Sobey will of course be just fine. When the GST came in my Renovation Company lost 40% the first year and took 6 years to recover and that was 7%. This is 9%! Hello underground economy.

  • critic
    February 24, 2013 - 16:11

    WORST GOVERNMENT EVER.AND EVER IS A LOOOOONG TIME.ONCE AGAIN,WORST GOVERNMENT EVER,LED BY THE WORST PREMIER EVER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  • fred
    February 24, 2013 - 15:46

    25 million a year; seems like just the right amount that will be going into their pension fund every year for the next 20 years ! What a coincidence.

  • reality check
    February 24, 2013 - 15:46

    This province needs to balance its budget. In the last 30 years, the only times we had a surplus was in 1982, 1984, 1996, 1999, 2006, 2007. That is a horrible track record. If you or I consistently used our credit cards and lines of credit to supplement our lifestyle for 24 out of 30 years then we would be bankrupt. We have a problem in PEI -- we must either cut services by $80m a year -- or we must raise revenue by that amount. Or we must do a bit of both. We CANNOT keep paying for services being used by today's population using the credit card of tomorrow's taxpayers. We must live and govern ourselves responsibly. The way Ghiz Jr, Binns, Milligan, Callbeck, Ghiz Sr, Lee and MacLean have run this province into the ground through their policies is intolerable to me and many many other islanders. If we cannot raise $80m in new revenue then we need to find $80m in cuts. It is that simple.

  • don
    February 24, 2013 - 15:12

    they must be liberals that done the report

  • Spin Doctor
    February 24, 2013 - 15:10

    Wheeeee! Enjoy the ride suckers. Remember, Ghiz had no mandate here. Quite the opposite - he promised the opposite. I can't believe I voted for him a second time. Sorry.

  • OH BOY
    February 24, 2013 - 15:09

    Let's See! The HST is forcast to increase revenues on PEI by $25 million. Therefore! The net decrease from Islander's pockets will be $25 million. Do I have this correct????? Do politicians think the ordinary person is just plain stupid?

    • intobed
      February 25, 2013 - 13:05

      Actually, oh boy, it is far worse. The government is getting $25 million, but farmers (the ones who lobbied hard for the HST) will be paying $4 million less in tax, and I keep hearing businesses will pay much less in taxes too. So the money coming out of our taxpayer's pockets is probably close to $35 million, or more.

  • Robot Gizz
    February 24, 2013 - 15:08

    This is BS.Its akin to saying if I give my son more weekly allowance the family will be better off because of the income he's making! Come on folks THINK.The whole problem is that the wealth is be gathered up and horded by the big banks(threw interest payments) and the rest of us are fighting over the remaining scraps.Govs,corps, and individuals are all struggling to meet budgets.Its because we have been told that there isn't enough to go round. There would be if the banks were not ALL CROOKS.

  • buce
    February 24, 2013 - 14:41

    If those who are predicting great things are about to come after the HST comes to PEI were in the smallest way honest with their predictions When GST was brought in we were told that we were already we would have a different tune. Islanders at this moment all pay GST on everything they use or purchase. What we don't pay is PST on such things as gas, electricity, clothing, houses, haircuts and so on. This where the rubber hits the pavement. Yes businesses will get their pst back that they will pay but don't presently pay , even the poor farmers too. So general public remember you won't get yours back even though businesses do ,think that is fair?

  • Concerned Citizen
    February 24, 2013 - 14:36

    It will increase revenue for the government but take more money out of the taxpayers pockets.

  • whatever
    February 24, 2013 - 14:25

    more taxed crap dumped on the backs of the working poor. got to keep them down anyway you can.

  • johnny cash
    February 24, 2013 - 14:19

    So much encouraging news for the average consumer. With our mental midgets in control i expect to take home so much less and fill the pockets of the anointed few by that much more. Ya i really can afford this hated sales tax. Please note the sarcasm!

    • Wes economics
      February 24, 2013 - 20:19

      It must be a magic tax business gets money back .Consumers pay One percent less tax and government makes extra 25 million.And we fall for it Only thing missing when it's done is a smoke