Nova Scotia to reduce HST by one percentage point to 14 per cent
The change requires legislative changes and is supposed to come into effect April 1, 2025
Days before he is expected to call a snap election, Nova Scotia Premier Tim Houston announced he plans to cut sales tax by one percentage point.
Nova Scotia has a harmonized sales tax (HST) rate of 15 per cent. Five per cent goes to Ottawa and ten per cent goes to the province. Houston is proposing to drop the provincial portion to nine per cent, bringing HST to 14 per cent.
The change is supposed to come into effect April 1, 2025.
At a news conference where Houston announced the cut, he began by talking about health care and his party's promise to "fix" it during the last general election. That promise helped launch them into power.
"Between the 2021 election and now, things have changed, the world has changed in a lot of ways. Health care was the No. 1 priority facing Nova Scotians back then, it still remains a top priority for sure, but also is affordability," he said.
"People are burdened by the higher cost of of everyday items and they feel it every time they make a purchase."
The province has notified the Canada Revenue Agency, which requires 120 days notice. The government will also have to pass legislation to enable the change.
The government will see a loss of more than $260 million in tax revenue. Houston would not say exactly how the loss will be accounted for, only that it will be "part of the budget process" and that he considered it an investment.
"I'm confident in our ability to manage the finances of the province," he said.
The Tories have tabled deficit budgets since coming into power, but at the end of their first two fiscal years they ended up with surpluses.
The cut would be the first change to Nova Scotia's HST rate in 14 years. The last change was a two-point increase by the former NDP government.
Liberals wanted to drop HST by 2 points
Earlier this year, opposition Liberal leader Zach Churchill promised to drop the HST by two points to bring the rate back down to 13 per cent, as it was prior to 2010. At the time, Houston acknowledged Nova Scotians could use some tax relief, and said it was getting "close to a point" that he would make taxation a priority.
Houston said the Liberals' two-point cut is not feasible, at least not yet.
Churchill disagreed.
"All the premier would have to do to provide a bigger tax cut is to stick to his own budget," he told reporters following Houston's announcement.
Churchill was referring to overspending the Tories have done throughout their time in power — something the Auditor General and opposition have repeatedly criticized for lacking in accountability and transparency.
NDP Leader Claudia Chender said affordability is clearly an issue, but she does not think an HST cut is the right solution, and said the premier's announcement seemed like election manoeuvring.
"People will probably welcome the promise of a tax cut. What we saw here, I think, was a stump speech," she told reporters.
Nova Scotia's fixed election date is next summer, but speculation over a snap election has been ramping up and a call is widely anticipated this weekend.
Chender said cutting the HST will mostly help people who need the least help.
"It benefits the people who buy the most, and I think that we need right now is relief that helps the people who need it the most."
She pointed to her party's proposal to completely remove HST from essentials, including groceries, and increasing the home heating assistance rebate.
New Brunswick, P.E.I. and Newfoundland and Labrador have 15 per cent HST. Ontario has 13 per cent HST.
The three territories and Alberta only have the five per cent GST, while Saskatchewan, Manitoba, British Columbia and Quebec have in addition to GST a provincial sales tax, the rates of which range from six per cent to nearly 10 per cent.
