P.E.I. ponders HST increase amid secret plan?

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Premier Wade MacLauchlan

Just say no, Mr. Premier. We already pay enough taxes. We can’t afford any more. Don’t fall into the trap of making draconian spending cuts while also raising taxes — just to balance the budget.

As Kevin Lacey, Atlantic director of the Canadian Taxpayers’ Federation argued Tuesday, raising taxes in a tough New Brunswick budget is not the way to grow the economy. Tax increases are counterproductive.

But N.B. did just that, raising its HST two points to 15 per cent.

We may never know when the deal was formally struck, but it seems November 6, 2015, in Charlottetown is the likely winner. In the giddy days immediately after the October 19 federal election, when 32 Liberal MPs swept to victory in Atlantic Canada, the three Maritime Liberal premiers met in Charlottetown.

The red tide which swept Atlantic Canada federally was about to also engulf Newfoundland and Labrador provincially.

It’s likely the three premiers discussed how they were going to handle harsh spring budgets and their plans for possible HST harmonization.

The P.E.I. Opposition issued warnings the past week about an imminent HST increase here. Nova Scotia Premier Stephen McNeil was making public comments in support of harmonizing the region’s HST rate and it didn’t take long for the Opposition to take its cue.

New Brunswick did its part Tuesday to match the Nova Scotia rate of 15 per cent. The pressure is now on Prince Edward Island to follow suit and increase its rate from 14 to 15 per cent. P.E.I. Premier Wade MacLauchlan is being pressured to join the 15 per cent club in April when the provincial budget is brought down. There are incentives for the premier to follow his Maritime counterparts as a HST increase would be an immediate cash cow.

N.B. Premier Brian Gallant is desperate for revenue and the HST hike will generate an additional $300 million a year but the province will still run a deficit of $347 million this fiscal year. The N.B. budget was termed a tax and spend document with a side order of cuts which doesn’t achieve a whole lot at the end of the day.

P.E.I. can take a more balanced and cautious approach by holding the line on tax increases while tightening spending controls to keep the province attractive for investment and job creation. Raising taxes means less disposable income to purchase retail products. It would be a mistake.

P.E.I. doesn’t have to follow the N.B. lead, no matter what was promised last November.

The P.E.I. government hopes to balance its budget for the coming fiscal year. It’s a laudable goal but not at the cost of tax increases which places an added burden on residents. Don’t try and balance the budget on the backs of over-taxed Islanders.

Mr. McNeil suggests that increasing the HST makes sense for businesses and streamlines economic co-operation. Maybe it does for N.S. which has had the 15 per cent rate for some time. It makes sense for N.S. but it doesn’t make sense for P.E.I. which now enjoys a competitive advantage.

The federal government will soon invest billions in infrastructure to stimulate the economy, so why are the provinces intent on moving in the opposite direction?

The Liberal win federally and the party holding power in all Atlantic Canada was supposed to offer an opportunity to work closer together. This isn’t happening.

N.B. tabled the year’s first budget in Canada and it is viewed as a prototype austerity document that sets the tone for what is to come nationwide. It doesn’t have to be this way.

Stimulus spending worked well for the Canadian economy in 2008 with a worldwide recession gaining steam. With growth prospects decreasing for 2016, why are the provinces moving in the wrong direction?

A Toronto bank economist applauds the N.B. budget plan as reasonable.

It is if you’re living in Toronto. But for taxpayers in Cap Pele, N.B., the budget is a huge burden.

Organizations: Liberal MPs, Toronto bank

Geographic location: Atlantic Canada, New Brunswick, Nova Scotia Charlottetown Newfoundland and Labrador Prince Edward Island Maritime Toronto Cap Pele

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Recent comments

  • Plugged in
    February 05, 2016 - 12:05

    Half of the island residents are sucking on the Island Udder,,I look down the street in my area and almost every house hold has 1 and sometimes 2 or more gov paychecks coming in. What do you expect???The Ottawa money tree is not bearing much fruit these days. These gov jobs and pensions need support...This is the result of too much government involvement,jobs,and therefore pensions over the last 50 years..Our poor children are going to inherit a terrible mess made by BOTH parties and a generation of entitled baby boomers.

  • Easterner
    February 04, 2016 - 19:53

    Islanders deserve what they are getting; as they voted for Wade and the Ghiz crew!

  • Hey , Why All The Fuss
    February 04, 2016 - 15:05

    Hey , why all the fuss ?? isn't this what you wanted ? You voted for higher taxes when you knew Justin was planning on borrowing to run the country for three years . As anyone with anything between their ears know has to be paid back . The government hasn't any money other than taxpayers .

  • Peter Johnsson
    February 04, 2016 - 14:37

    Seems to me, Robert Ghiz was asked about HST and his reply was, HST is not on the table ... then he screwed us with it and called it his "greatest accomplishment" Anyone that believes a politician is, IMO a fool!

  • Quiet Observer
    February 04, 2016 - 12:59

    If one follows the absurd logic of all 3 provinces having the same HST rate, then that same logic dictates that we have the same provincial income tax rates, the same exemptions, the same indexing and the same fees charged by governments for assorted services. Are our provincial governments prepared to do that? Doubt it.

  • John
    February 04, 2016 - 12:27

    If you think this is bad wait till the GST is raised to 6% or back to 7% on top of the 15%. Please don't say this is not going to happen.

  • Dug
    February 04, 2016 - 12:26

    HST/Secret plan ?? they have already made up their mind to increase it, just like dear old Wes when he said "no hst on pei " and two weeks later BAM we got it.

  • Kyle
    February 04, 2016 - 10:10

    if the logic is the maratimes have to tax the same ,we will have to find out from each leader if they plan on raising hst before an election ,because the other 2 will have to follow. if the Premier does this they should be voted out next elect,

    • olddog70
      February 04, 2016 - 13:45

      NO, if he does we need recall legislation.