Roger Melanson proposes to scrap HST referendum requirement

The Gallant government is proposing a bill that would scrap the legislative requirement to hold a referendum on a Harmonized Sales Tax increase.

Finance Minister Roger Melanson introduced the Act Respecting Responsible Governance on Friday, which repeals the Taxpayer Protection Act, Fiscal Transparency and Accountability Act and Health Care Funding Guarantee Act.

"There are no requirements for these types of legislation. A government cannot bind future legislatures to a specific budgetary policy," Melanson said in the legislature.

​He said the government needs the flexibility to tax if cuts don't help New Brunswick's flailing financial situation.

"We want to look at the revenue side, through economic growth, absolutely, and raising taxes is not part of something we would like to do, but everything has to be on the table."

The HST, a combination of provincial and federal tax implemented in 1997, currently stands at 13 per cent and is charged on everything from prepared food to gas.

Melanson said he doesn't know if the HST will be increased. He is currently working on the upcoming budget.

But the prospect of an increase is not going over well with the taxpayers CBC News spoke to in Fredericton on Friday.

"That's a rip off. That's completely a rip off," said Charles Heinekamp.

"I think the Maritimes pays high, high taxes," said Gloria King. "I lived in B.C. for 21 years and there's no comparison."

CFIB 'deeply concerned'

The Canadian Federation of Independent Business says it's "deeply concerned" about the government's proposal, which would eliminate the legislative requirement to have taxpayers vote on increasing the HST, creating new taxes, or imposing tolls on the province’s highways.

"We viewed this legislation as an important protection for New Brunswickers," Denis Robichaud, director of provincial affairs for CFIB in New Brunswick, said in a statement.

"We certainly hope that this move doesn’t signal the government’s intention to move towards less accountability and higher taxes," he said.

"With many New Brunswickers and businesses struggling now, going back to them to ask for more tax dollars would be unfair without the government first doing its due diligence, prioritizing its spending, and trying to provide services as efficiently as possible."

The CFIB supports the government's goal to cut spending by at least $500 million, but opposes tax increases, Robichaud said.

In a pre-budget survey, eight out of 10 CFIB members said the overall size of government should be reduced in order to balance the books, he said.

'Absolutely disgusting'

Former Tory finance minister Blaine Higgs says it's a dark day for democracy.

​"I think it's absolutely disgusting," said the Quispamsis MLA. "We worked very diligently to get control of spending. And not just increase our taxes as a way to offset our spending habits."

Higgs says he feels his four years of cutting and saving have gone up in the smoke of old-time politics, where a party makes promises, then raises taxes to cover them.

"It's like, 'You vote me in, I'll spend more, and then I'll cause you to pay for it.'"

A potential HST increase could fund a "spending free-for-all," Higgs said.

When Higgs floated the idea of increasing the HST by two percentage points in 2013, the former finance minister said it would raise $270 million.

In 2005, former premier Bernard Lord introduced a provision that required the provincial government to hold a referendum if it wanted to raise the HST, impose highway tolls or create a new tax.

At the time, the provincial government was in a surplus situation.

Now, the provincial government is staring at a projected $255-million deficit in the current fiscal year.

The Liberals have also embarked on a strategic program review seeking $600 million in combined spending cuts or increased revenue.

The proposed bill is also repealing sections of the Legislative Assembly Act as it relates to MLAs crossing the floor.