‘Step up’: Freeland urges provinces to follow Ottawa on tax ‘holiday’
The federal government is calling on the provinces to “step up” and drop their sales taxes on certain items in line with Ottawa’s proposed two-month relief period.
But Finance Minister Chrystia Freeland won’t confirm whether Ottawa will compensate the provinces with a harmonized sales tax who are set to see a shortfall in planned revenue under the proposed “tax holiday.”
Last week, Prime Minister Justin Trudeau announced plans to waive the GST and HST on a select number of items starting Dec. 14 in what he called a “break” for Canadians struggling with the higher cost of living.
In provinces with the harmonized sales tax, the federal government remits a portion of the proceeds to the provinces, rather than imposing a separate GST at the federal level and the PST in the provincial jurisdiction.
New Brunswick Premier Susan Holt told Information Morning Fredericton last week that the tax holiday was a “surprise” to her new Liberal government, given only a day’s notice before the announcement.
“We’re trying to figure out now what this means,” Holt said, estimating the announcement will work out to $62 million in lost revenue for New Brunswick.
Holt said she is looking to the federal government to cover the hole, and Prince Edward Island Premier Denis King has made similar statements. Newfoundland and Labrador Premier Andrew Furey has said he is on board with the federal government’s plan.
Freeland spoke to reporters on Monday and was asked whether the federal government is planning to compensate provinces with the HST, which includes Ontario and the Atlantic provinces, for the loss of revenue. She did not answer the question directly.
Instead, she spoke about the positive boost that the proposed “tax holiday” would have on
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