The HST is just a month away from going live in P.E.I., but even though it was announced last year, some Island businesses and residents are unsure what the new tax rate will be.
Employees at The Buzz in Charlottetown noticed this recently when they received an advance invoice for a purchase taking place this summer.
The company that sent the invoice was a sizable and established P.E.I. business.
But when they opened the invoice, the Buzz employees noticed they had been charged a 15 per cent HST.
When the harmonized sales tax comes into effect on April 1st, the current 15.5 per cent PST and GST rate will be blended into a 14 per cent HST – not 15 per cent.
“It even put doubt in my mind, I had to go and make sure because when we got that invoice, we were all surprised,” said Yanik Richards, website administrator for The Buzz.
“I would have thought that the way news spreads across Prince Edward Island that it would have been fairly common knowledge the HST will be 14 per cent.”
Richards then posted an informal survey online, asking his readers if they knew what the HST rate will be in the form of a multiple choice question. Almost half of those who responded chose the 15 per cent option.
“I was surprised by the result, especially considering a lot of people might just look it up first and then answer,” he said.
“I know they were having information sessions, but I don’t know how effective those were. “
The provincial government did hold a number of information sessions across the province to educate businesses on the steps they must take to adjust their books and billing practices to the new tax.
These sessions were divided into sector specific categories, such as retailers and manufacturers, tourism and accommodations and the construction industry.
Erin McGrath-Gaudet of the Canadian Federation of Independent Business took part in one of these sessions. She said they offered companies a good basic understanding of the HST and how it will work, but she is anticipating many more questions will arise once it takes effect in April.
She expressed surprise, however, when told that at least some Island businesses appear have a mistaken idea of what the HST rate will be.
“To be honest, this is the first I’ve heard of anyone thinking it was going to be 15 per cent. Mind you when we are meeting with our members we go out to them with that information,” McGrath-Gaudet said.
Some businesses have already had to begin applying the HST as of Feb. 1st for certain types of items and services, but most P.E.I. companies are only now beginning the process of looking at what they will have to do when the new tax comes into effect next month.
“A lot of them are just getting into that mode now, so businesses are certainly asking a lot of questions about what they need to do to get ready, but this is the first I’ve heard of any confusion around the rates,” McGrath-Gaudet said.
“Typically it seemed to be very well communicated. I mean, I was certainly under the impression most people knew what the rate was going to be in P.E.I. but obviously I was wrong.”
Richards said he thinks government should perhaps consider issuing public service announcements to ensure all Islanders and businesses are clear about what the new tax rate will be.
“It's important for people to know that this error could materialize anywhere, even where you'd least expect. So, when the HST comes into effect, everyone should be checking their receipts.”