UPDATED February
25, 2008
PEI
Federation of Labour Happy With the Province’s Decision to Reject the
HST
“The PEI Federation of Labour
would like to express its happiness in the Provincial government’s
recent decision to reject the implementation of the Harmonized Sales
Tax (HST) on PEI.” States PEI Federation of Labour President Carl Pursey
The main problem with the HST is the same now as when the province
first rejected this concept approximately 11 years ago. By removing the
tax exempt status from so many of the items that are essential in all
Islanders’ day to day lives. The HST would have brought major hardships
to many Islanders especially to those that can least afford it.
As we have seen recently with the troubles many are having with the
increased minimum requirements for home delivery of heating oil and the
recent substantial increases in heating oil and electricity rates,
there are many Islanders who are having problems making ends meet. What
would have happened if this government had implemented the HST and all
of sudden Islanders are faced with an extra 8% increase in:
• their home heating oil bill
• their electricity bill
• their clothing and footwear bill
• and if applicable their costs for baby
and educational supplies and textbooks.
The pipedream that consumers on PEI would have seen a tax reduction
from the HST is simply that a pipedream.
This was reinforced on January 23, 2008, when the Saskatchewan
government announced that they were rejecting the federal proposal for
a harmonized sales tax because it would be too big a hit for consumers.
They concluded that the HST would end up costing Saskatchewan residents
$400 million and that the incentive from the federal government, in the
neighborhood of $180 million, was “no where nearly enough” to cushion
the impact and make the change. This was not Saskatchewan’s first time
dealing with the HST in 1991, the province briefly implemented
harmonization. However, the move was so unpopular that when the
provincial government changed power a few months later the HST was
immediately killed it.
Plain and Simple the HST is a bad tax for the general public because it
unfairly shifts a large tax-burden from businesses to consumers.
Economists estimate that harmonization in the five provinces (British
Columbia, Saskatchewan, Manitoba, Ontario and Prince Edward Island)
that run a separate provincial sales tax system (Alberta has no
provincial sales tax) would result in a whopping $7.5-billion shift in
taxes from businesses to consumers.
The PEI Federation of Labour was also very concerned over the impact
the switch to the HST would have had on jobs at the Department of the
Provincial Treasury. If the switch to the HST occurred, it would cause
the PST to be moved from being provincially administrated to being
absorbed into the federal system, we were very concerned that this
could have resulted in significant job losses in the Department of the
Provincial Treasury.
“At a time when PEI is already struggling to keep University Graduates
and highly skilled workers here on the Island, the elimination of any
good, relatively stable and well paid jobs would have had a more
detrimental affect to our Island economy than any of the benefits that
the HST would have provided.” Mr. Pursey continues.
“In the end, we are glad that this government has put public interest
first and realized that the HST would have had major
detrimental affects on Island consumers especially low income
Islanders. On PEI where 26.4% of our workforce (15,000 Islanders) earn
less than $10/hr, the HST would have been a major hardship. There were
no savings to be had for Island Consumers. We are very glad
that the provincial government has realized this.” Concludes Mr. Pursey
Background Information:
Goods
Exempt from Provincial Revenue Tax (PST) on PEI
Press
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