Province in no position to cut HST: minister

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HALIFAX – Nova Scotia’s finance minister says a cut in the harmonized sales tax scheduled for next year is in jeopardy

Nova Scotia Finance Minister Diana Whalen

Diana Whalen said Tuesday that the province can’t afford to lose about $190 million in revenue for each percentage point cut in the HST.

“Given the figures that we have been presented with it will become clear that it is not the right thing to do at this time,” Whalen said in an interview. “We will not be cutting off any source of revenue because we cannot afford to do so.”

The former NDP government brought in legislation to cut the HST by two percentage points over two years, beginning next year, which would bring the tax down to 13 per cent.

While Whalen wouldn’t give specifics about the figures to be presented in a fiscal update she is scheduled to release Thursday, Whalen said projections by the previous NDP government are significantly off the mark.

Whalen said the province’s overall fiscal situation is worse since the NDP announced in August that the province was running a slender surplus of $18.3 million.

She said revenues have fallen to lower levels than were projected in the previous update, which she said was “overly optimistic.”

“I think this update will show that even revenue sources that we were counting on were depressed in the last six to eight months,” Whalen said.

The NDP said its acting leader, Maureen MacDonald, was unavailable for comment. MacDonald was the party’s finance minister before the NDP was defeated in October’s election.

Whalen said the province’s latest financial numbers also throw into doubt when the books can be balanced, although the government is promising to eliminate the deficit before the end of its mandate. She said balancing the books will largely be tied to ongoing signs of an economic recovery in the United States, the main customer for Nova Scotia exports.

Based on what she heard from the other provinces at meetings this week of the country’s finance ministers, Whalen said Nova Scotia is likely looking at balancing its books on the same timeline that her counterparts outlined — within two to three years.

“I’m taking a bit of a lead by what’s happening in the other provinces because they are very much in the same situation with their economies,” she added.

Whalen said the NDP was “ideologically tied” to a balanced budget because the party promised to eliminate the deficit in the 2009 election campaign.

“I think they had so much at stake that they really bent and twisted the budget … to create the illusion of a balanced budget,” she said.

Whalen said the government will continue to control spending while any discussions about potential program cuts would have to wait until budget consultations begin in January.

Note to readers: This is a corrected story. A previous version said the NDP forecast a surplus of $16.4 million in August.

- by Keith Doucette - The Canadian Press

Organizations: NDP

Geographic location: Nova Scotia, United States

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  • lol
    December 19, 2013 - 17:10

    Didn't they say they would cut the HST if voted in? or am I wrong. Just another lie to get in. That's how the NDP got in, and then back out. Keep your word for once.

  • Dmac
    December 19, 2013 - 05:30

    We'll here we have another situation where it is obvious we have elected another government that cannot see the forest for the trees. We have to make the pie bigger folks. That way more people get to share in the potential wealth. The high taxes in Nova Scotia kill any real world incentive for investment here and all we end up with is transient, government provided incentive which draws or supports typically uneconomic investment. This whole cycle is absolutely mind-numbing in its backasswards logic. IMO these people have the entrepreneurial and strategic thinking capability of a fruit-fly., same as the last government.

  • Dmac
    December 19, 2013 - 05:29

    We'll here we have another situation where it is obvious we have elected another government that cannot see the forest for the trees. We have to make the pie bigger folks. That way more people get to share in the potential wealth. The high taxes in Nova Scotia kill any real world incentive for investment here and all we end up with is transient, government provided incentive which draws or supports typically uneconomic investment. This whole cycle is absolutely mind-numbing in its backasswards logic. IMO these people have the entrepreneurial and strategic thinking capability of a fruit-fly., same as the last government.

  • wingman
    December 18, 2013 - 19:00

    No wonder young people cannot wait to get out of this Province everything costs more to live here. Where I am right now gas is only 84 cents a liter, power is only 8 cents per Kilowatt hour, milk is $3.50 a gallon, eggs are only $1.00 a dozen and on it goes. The only people staying in this Province are retired people who cannot afford to leave but the government keeps handing the money out to big corporations while the taxpayers freeze in the cold and many go hungry and health care forget about that unless you can afford to go somewhere else and pay for it because our 15% is used to prop up dying industries i.e. pulp mills etc.

  • Fuzzy Bear
    December 18, 2013 - 09:28

    Only Gomer Pile hand the right words for this decision.....Surprise - Surprise - Surprise!! Without a tax revolt from the paying peasants why would any monarch kill their cash cow or golden goose.