Federal government-imposed “tax breaks” could be costly for some states, officials from two state governments said Thursday that the federal government would suspend sales taxes on some products. He said he was “blindsided” by the prime minister’s announcement.
Prime Minister Justin Trudeau on Thursday said he would aim to increase the GST and HST on some goods through mid-February to alleviate some of the affordability pressures people are experiencing in the post-pandemic era. said.
Canada’s five provinces have a uniform sales tax that combines provincial and federal taxes on goods and services administered by the federal government. Ottawa remits the provincial portion of sales tax to each province.
A spokeswoman for Finance Minister Chrystia Freeland confirmed that if the tax cut plan goes ahead, the HST would be abolished entirely in the provinces that harmonize sales taxes, namely the Atlantic provinces and Ontario.
But officials in the two states said they were given less than 24 hours notice that the entire sales tax would be eliminated.
He also said it was unclear whether he would receive any compensation from the federal government for lost tax revenue.
Representatives from the two provincial governments with HST spoke to CBC News on condition that neither governments nor provinces be identified due to the sensitivity of the issue.
Responses vary by prefecture
Newfoundland and Labrador Premier Andrew Furey backed a federal plan to immediately provide a “tax holiday.”
Mr Furey, one of only two Liberal premiers in the country, said: on social media platform He welcomed the proposal to remove HST from many goods and services for two months.
New Brunswick Premier Susan Holt was more cautious.
“We’re just trying to figure out what it is and how much it’s going to cost,” Holt said Thursday. “Will this hurt the state’s revenue this year because it will cost the state tax revenue?”
Ontario already excludes the provincial portion of the HST from some items proposed for federal tax relief, including children’s clothing, shoes, diapers, books and newspapers.
“The best thing the Liberal government can do right now is to cancel, or at least pause, the sixth carbon tax increase on April 1,” Premier Doug Ford’s office said in a media statement. . ”
Nova Scotia is currently in the midst of an election campaign, so the provincial government is in interim mode.
Prince Edward Island did not immediately respond to a request for comment.
