Rise in prepaid funerals expected before HST

Some people on P.E.I. hope to beat the tax increase on funeral services.

Currently, the five per cent GST is applied to purchases such as coffins and the service itself.

But when the harmonized sales tax is brought in next spring, the taxes applied to funeral costs will increase to 14 per cent.

Finance Minister Wes Sheridan said he expects this year will see an influx of prepaid funerals.

"Other jurisdictions have allowed to go on to about six months before the implementation of harmonization and at that time they stopped the loophole, but until that time I would expect most funeral homes would be taking advantage of that opportunity," Sheridan said.

He announced the implementation of the HST in last month's budget.

Funeral homes could decide to absorb the extra costs and get an HST rebate, Sheridan said.

He said he'll meet with representatives from Island funeral homes in the next couple of weeks.