NS Contemplates Tax Hike

NS: Chamber requests study to judge impact of tax increase
By Darrell Cole, Transcontinental Media

Source: The Amherst Daily News, Feb. 16, 2010

[AMHERST, NS] — The president of the Amherst and Area Chamber of Commerce is urging the province to tread carefully before it considers increasing the HST by two per cent.

“It would be very unfortunate for business in this part of Nova Scotia to have another two per cent added to the HST because it’s going impact their competitiveness and give people another reason to cross the border to New Brunswick,” chamber president Randy Smith said.

While the province has yet to raise the HST, Finance Minister Graham Steele has been giving strong hints that could happen when he brings down his government’s budget in the spring.

Steele is in the middle of a cross-province tour gathering input from Nova Scotians on how best to fight the deficit and one of the things he has been hearing is people are open to an increase in the HST.

Smith, on the other hand, is supporting a call by Cumberland South MLA Murray Scott to have government conduct a study of cross-border shopping habits and whether creating a two per cent difference in tax will drive more people to stores in New Brunswick.

“It’s going to be a huge problem in our area,” said Smith, who recently appeared before the Nova Scotia Utility and Review Board when that organization held hearings in Amherst on gas prices between the two provinces. “People will drive to Sackville and Moncton to save that money, especially on the big ticket items. It’s already happening, this is going to make it worse.”

If the tax is increased, he said, people are going to have to lower their prices to compete and if they don’t get the mark-up they need to survive, many of them are simply going to go out of business.

Steele said he is very aware of the situation being faced by storeowners in the Amherst area, but he’s not sure what the answer is. Still, he’s willing to consider it before moving ahead.

“Any time you raise or lower tax, one of the essential elements you look at is how you stack up to neighbouring provinces and any province we’re competing with,” Steele said. “We’ll look at the impact it’s going to have.”

Steele said this issue is a not a new one and is faced in other jurisdictions.

Recently, convenience store opener Tony Hubert said he is closing his business because he can’t compete with New Brunswick retailers, who can sell tobacco and milk at lower prices.

With gas four to seven cents a litre cheaper, Hubert said people are going to Aulac and Sackville to buy cigarettes and milk and are purchasing gasoline and other staples while they’re there.

Smith said he plans to talk to the finance minister when he’s in town next week.