CRA calculation error leads to confusion about HST rebates on P.E.I.

A math error by the Canada Revenue Agency may have caused some concern for Islanders waiting for their quarterly HST credit payments.

In notices sent to P.E.I. residents July 5, the CRA overcalculated the provincial portion of the harmonized sales tax credit, telling Islanders their October payments would be as much as $240 more than they will actually be receiving.

The agency wouldn't tell CBC how many Islanders were affected, but said it was a "large number." Households that earn less than $60,000 qualify for the credit.

On Aug. 5 the CRA began issuing corrected notices, but without informing Islanders a mistake had been made. The revised notices simply told taxpayers their credit amounts had been reviewed "based on an update to the information on file."

"They didn't really explain much as to what had happened and why," said Rob MacKay, a chartered professional accountant who runs Charlottetown tax preparation business Tax Plus.

"Which is concerning for clients because some of them think that there's an error on their return and they're on the bad side with CRA, so that causes anxiety."

What's more, the revised notices sent in August included a new error. While they included the correct amounts for the provincial portion of HST credit payments, they told Island taxpayers they would be receiving nothing from the federal portion of the payments.

MacKay shared numbers from one client who was told in July their total October HST credit payment would be for $381.50. Then in August they were told that payment would be for $27.50.

In fact, MacKay said that client will receive the same amount in October that they received in July: $141.50. But neither of the notices they received from the CRA so far include that figure.

"I'm an accountant, I understand what happened. But to most people, it appeared that they were losing the GST credit for the federal portion and that the provincial portion was decreased by $240," MacKay said.

The CRA said in an email that "incorrect information was utilized" when the July notices were generated.

"This issue did not have any financial impact on taxpayers," it said. "We regret any confusion this may have caused."

The P.E.I. government also provided a statement, saying: "For clarity, the federal GST/HST credit is not being clawed back."

Some Islanders who reached out to CBC said they had already been making plans on how to spend the money. Others complained of a lack of clarity in the information put out by the CRA.

MacKay said for some people on a fixed income, the credits comprise as much as one-third of their disposable income.

"I know some friends in nursing homes for example, there they have a small comfort allowances," MacKay said. "This rebate is significant to some people. So it can be quite concerning."

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