Controversial harmonized sales tax took effect April 1, 2013
It has been one year since the Liberal government brought in the HST, but at least one anti-poverty advocate doesn’t see any benefit to the tax regime.
Mary Boyd with the P.E.I. Coalition for a Poverty Eradication Strategy said if ever there was a province that had a case for not having the HST it was P.E.I. because of the state of its economy.
“It’s been a very big burden on low income people,” she said.
The HST went into effect on April 1, 2013 bringing with it a shift in how Islanders pay for things by combining the five per cent HST and nine per cent PST into a single 14 per cent tax on many items and services.
That’s a drop from the 15.5 per cent Islanders used to pay on some things when both taxes were applied on top of each other.
It also means Islanders are paying sales tax on some items they never used to, leading to criticism about increased costs because of the HST.
The latest figures from Statistics Canada show P.E.I.’s consumer price index increased by 2.7 per cent from February 2013 to the same month this year.
That’s due in part to a 7.6 per cent increase in energy costs, 5.2 per cent higher clothing costs and a 0.2 per cent increase in food prices.
To offset added costs, the provincial government gives eligible Islanders a rebate worth $150 to $200 a year, depending on their household income.
Boyd said the government promised those rebates would take care of low-income Islanders and they would provide benefits in many ways.
“The benefits are not evident at all,” she said.
With Boyd saying she expects the amount of food insecurity to increase and people to spend less, she doesn’t see the HST benefiting small businesses either.
“Who is it benefitting? I don’t know,” she said.
Now that the tax has been in place for one year, Boyd said she thinks warnings about its negative impact have come true.
“One could say the first year of the HST has been a total failure and it’s been a total punishment for a lot of people.”
Attempts to contact Finance Minister Wes Sheridan were unsuccessful, but in February he spoke to The Guardian about the consumer price index increase and said he expects to eventually see prices drop as businesses adjust to the HST.
“You will see that disappear in the next year,” he said.