Finance Minister Wes Sheridan delivers the budget speech.
The HST is coming to P.E.I. next year.
Finance Minister Wes Sheridan announced the imminent implementation of this controversial tax as part of the 2012 provincial budget, delivered this afternoon at Province House.
The provincial rate will be reduced from 10 per cent to nine per cent. Combined with the federal rate, the harmonized sales tax in P.E.I. will be 14 per cent. This will apply to the same goods and services currently taxed under the GST, which does not include such things as groceries and prescriptions drugs. But it will also apply to things Islanders do not currently pay taxes on, notably electricity.
The province will exempt home heating oil, children’s clothing and children’ footwear under this new tax model.
To help offset the added costs this new measure will impose on Islanders, a tax rebate of $150 to $200 a year will be given to all Island households that bring in $55,000 or less.
Sheridan told reporters this afternoon this accounts for 42 per cent of P.E.I. households.
The HST will be implemented on April 1, 2013.
Sheridan said this new tax system will help grow private sector jobs and will result in increased tax revenue for the province. This will help to get the province’s finances in better order.
“Today’s announcement will level the playing field for Island businesses in the region, reduce red tape, result in increased investment in jobs and growth and end the practice of applying the provincial sales tax on top of the GST,” Sheridan said.
The federal government is giving the province $39 million over the next two years in transitional assistance to help the province implement the HST.