NS: Premier promises HST reductions in coming years

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By Keith Doucette and Michael Tutton, The Canadian Press

Progressive Conservative Leader Jamie Baillie is dismissing the NDP promise as an election stunt.

Premier Darrell Dexter. — File

[HALIFAX, NS] — Last night, Nova Scotia budget Premier Darrell Dexter made a surprise promise to remove the two percentage point increase in the harmonized sales tax that his government brought in two years ago.

In a statement, Dexter says the NDP would take the sales tax down from 15 per cent to 13 per cent in two stages by introducing legislation this year to reduce the sales tax by one percentage point in 2014 and another point in 2015.

Dexter said in an interview that "in all likelihood" the tax decreases wouldn't occur until after the next provincial election, which must take place before June of 2014.

The premier was planning to deliver the promise during a speech in the legislature on Monday but the opposition parties spoke late into the night in their reply to last week's throne speech.

Dexter said reducing the tax has to wait until 2014 because of the province's deficit.

"That is when the province will have the capacity to do that (make the cut) without going into deficit," he said.

Progressive Conservative Leader Jamie Baillie dismissed the NDP promise as an election stunt.

"It's an NDP tax promise that comes with a big asterisk, and that is that you have to re-elect them first," he said. "Nova Scotians have been down this road before with the NDP who broke their last promise on taxes right after the election."

Both opposition parties have claimed the NDP broke a 2009 election promise when they put the two percentage point increase in the HST in place in July 2010.

Finance Minister Graham Steele has also promised "modest but real" income tax reductions in Tuesday's budget, but he hasn't offered any specifics.

Liberal Leader Stephen McNeil said the impact of any tax cuts in the budget are diminished by the millions of dollars Nova Scotians have provided to the province since the sales tax hike was brought in.

"He (Steele) has been offering pennies back to Nova Scotians," McNeil said Monday in an interview before the NDP made the HST promise.

Baillie said the government should eliminate its projected $260.8 million deficit immediately.

"A better way would be to balance the budget first, and lower taxes now so they could be truly judged on their record and not on another cynical pre-election promise."

Steele said the government has a plan to balance the books by next year.

"We do what we can afford," said Steele, who defended the 2010 increase in the HST. "It is necessary in order to continue to provide important public services."

Steele said the two percentage point increase was worth about $360 million a year to provincial coffers.

"So it kind of goes without saying that before you can reduce the HST by that amount you have to be running surpluses. Our plan has us getting back to balance next year and then running surpluses after that."

Finance Department figures show that the total revenue generated from the HST has increased since the 2010 hike from more than $1.1 billion in 2009 to a forecast of more than $1.5 billion at the end of fiscal 2011-2012.

But Don MacIver of the Atlantic Institute for Market Studies said the original increase in the HST put the province at a competitive disadvantage.

"It sends the wrong message," said MacIver. "It simply says we can manage to maintain our spending levels by adding a little bit here and a little bit there in terms of our tax take."

Steele made another pre-budget announcement Monday, saying the government would cut the small business tax.

He said the tax would drop by a half percentage point to 3.5 per cent, a move that would save small businesses $10 million annually. It's the third straight year the government has lowered the tax by half a percentage point.

Organizations: NDP, Atlantic Institute for Market Studies

Geographic location: Nova Scotians, Nova Scotia

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Recent comments

  • Byron Bible Hill
    April 14, 2012 - 22:25

    How can one believe what Dexter is saying when he and his NDP government have already done many of the things they said they wouldn't do. Like raising the GST, cutting education, medical health care and social programs to the core. Is there any political party with honest politicians who don't lie through their teeth just to get voted in and then slap the very ppl who voted for them on the face? There are three major parties in Canada and none of them are fit to govern the country at this point. They have all lied and gone back on their promises. Not to mention cutting services to the public that are used and needed like Public Access Internet. The whole government system needs a makeover and a new method of salary and expense payment. Not to mention cutting the Gold Plated pensions that they give themselves without asking their employers - the taxpayers of Canada. They have forgotten who they are working for. They should all be fired and a new crew hired.

  • Blue in the face.........
    April 05, 2012 - 15:15

    How quickly everybody forgets who put the NDP in this position...Jamie Baille's Progressive Conservatives....... heck in Truro alone, on Dexter's first day in office, he was told the PC's new 100 MILLION Truro hospital needed $80 MILLION more to finish it.... AND, that the governing tories slid 208 MILLION on to the provincial debt under the guise of a 19 MILLION budget surplus.......wow, those two things alone add up to almost 300 MILLION in unexpected bills......roughly the 2% HST increase. The Ndippers might have pulled the trigger but the tories were the smoking gun......lets try the liberals again....

    • Circle A Ranch
      April 09, 2012 - 19:28

      It's all a big farce .The Poly-ticks are worse than ever and all for self serving greed and prestige for power.There is not one party worthy of my vote.It will only change when people stand up and make a noise that demands attention!Sadly most will ride back to the ranch without uttering a word.

  • Dennis Ryan
    April 05, 2012 - 12:24

    I note that this announcement follows the Federal Budget in which, the lowly penny will disappear from our currency. 13% of $1.00 is 13 cents after rounding rules are applied that becomes 15 cents, so have we really gained anything? 15% if you spend a dollar and 13% when you spend $100. smooth move Mr. Dexter. Not likely any significant saving in the long run unless you pay with credit card.

  • Ashley
    April 03, 2012 - 18:27

    I am going to be voting for the first time next spring and I am happy to say NDP WILL NOT be getting my vote. You think they'd get so much as a glance from me on the ballet since the education cuts they've put through this year? I'm in university, and they're threatening to hurt the quality of this generation's education. Disgusting. Go Conservatives, they bring good to this province and always have. See ya Dexter, you had your chance and blew it big time.

  • Observer
    April 03, 2012 - 17:53

    It is time for the people of NS to make some cuts. Cut Dexter, cut Steele, cut Landry, cut Parker, cut MacKinnon, Cut the whole party. Cut the crap, vote em out!!

  • observer
    April 03, 2012 - 17:49

    Bria, time to give them a 100% pay cut, vote em out.

  • Alex Maclean
    April 03, 2012 - 15:33

    The freak show that is Canadian politics. Dexter, like most politicians, is nothing more than a self-aggrandizing panderer. Bombards the airwaves with these misleading advertisements very similar to Harper's own Economic Inaction Plan ads that are still running. Convince the people they're doing this and that for them and stay in power at all costs.

  • Brian Yorke
    April 03, 2012 - 14:19

    What a CROCK... You put the HST up very quickly.. why wait two years to bring it back dow. How about all you over paid and under worked politicians take a 5-10% pay reduction, take away all your non essential business expenses and start living like the people you represent. Shame on the NDP.. Remember Pigs get Fat and Hogs get Slaughtered. And you HOGS just lost my vote in the next election.

    • sickandtired
      April 03, 2012 - 17:26

      What is ever there for the working family who contribute to society with every pay check, that has many places to go ,insurances , mortage payments childcare , income tax .....tax tax ......with no G.S.T. refund No subized daycare, no free money and we are the ones who keep all the systems going rich and useless and lazy parasites alive . makes me sick

  • Kim Westville
    April 03, 2012 - 13:43

    People the ploy is here to buy a vote! We are not that gullible! - They have upped the GST! Cuts to our education and health care - they bailed out a failing pulp mill - no cuts to their government salaries though - power rates continue to rise - please! Never again NDP...Orange means Danger!