Nova Scotia Premier Tim Houston’s decision to reduce the provincial harmonized sales tax by 1% has resulted in applause from a taxpayer advocacy group.
Devin Drover, general counsel and Atlantic director of the Canadian Taxpayers Federation told True North that the tax cut follows 14 years of the HST being at 15% after the former NDP government hiked it from 13% to 15%, which the successive Liberal government did not touch.
The federal portion of the HST is 5%, and the provincial portion is currently 10%, set to drop to 9% on Apr. 1, 2025.
“We are very pleased to see action from Premier Houston on cutting the HST by one percentage point, which will save the average Nova Scotian over $350 per year,” said Drover.
The Canadian Taxpayers Federation had called for a tax cut in its pre-budget proposal, part of a broader set of recommendations to reduce tax burdens for Nova Scotians.
However, Drover said that the tax cuts shouldn’t end here.
“We think Houston should keep his commitment to cutting HST by one percentage point on April 1, 2025, but commit to a second percentage point cut on April 1, 2026,” said Drover. “This will double the savings for average Nova Scotia families to over $700 annually.”
Drover said that some people might argue that the government needs the tax revenue, but he said that it could be found elsewhere.
“Houston could focus on reducing non-healthcare spending to 2022 levels which would provide them enough savings both to send money back to taxpayers through HST cuts while also reducing the deficit and returning the province to balanced budgets,” said Drover.
The Canadian Taxpayers Federation’s pre-budget proposal also included calls for eliminating bracket creep, which occurs when governments don’t move tax brackets, and inflation pushes taxpayers into higher brackets despite their purchasing power remaining unchanged.
The taxpayer advocacy group also called on Nova Scotia to cut income tax bills by 5% and to replace corporate welfare with business tax relief. The CTF also called for government compensation to be brought in line with Nova Scotia’s labour market and for spending levels to be reduced.
Following the tax cut, Nova Scotians will have the lowest sales tax burden in Atlantic Canada.
“Where families are struggling to replace an old appliance, or looking to buy a new car, this HST cut will have a huge impact on the lives of Nova Scotians,” said Drover.