The provincial government’s HST hike will have an effect beyond people’s wallets, amounting to a tax on reading, some say.
As part of the 2016 budget, brought down Thursday, the provincial portion of the HST will increase from 13 per cent to 15 per cent. As of next year, that will also be applied to the sale of books, which are currently subject only to five per cent GST.
“As part of Budget 2016, the point-of-sale provincial HST rebate on books will be eliminated as of January 1, 2017,” a Department of Finance spokeswoman told The Telegram. “Public-sector bodies eligible for the federal HST rebate on books will continue to be eligible for the provincial portion.”
School boards and universities are among those eligible for the rebate.
Newfoundland and Labrador will be the only province charging HST on books, though it’s not the first to have tried it: in the past four years, the governments of P.E.I. and Nova Scotia both saw a backlash from the public after considering eliminating the rebate.
The amount earned by the province from taxing books will be dismally small, says Alison Dyer, executive director of the Writers’ Alliance of Newfoundland and Labrador, and another obstacle for local authors and publishers whose work boosts the provincial economy.
“Any increase in the cost of books is detrimental not only for the immediate buyer, but for our province and society as a whole,” Dyer said. “Newfoundland and Labrador has one of the highest rates of low literacy skills in Canada. That’s problematic, because lower literacy skills impacts a person’s ability to keep pace with the demands of our society and economy, impacts their employment and training potential, and has implications for reduced productivity, health and more. This obviously creates a challenge for individuals, our communities and our province.
“In a time of fiscal restraint, we should be looking at bolstering, not hindering, our population’s economic, social, health and creative well-being.”
Donna Francis, publisher at Creative Books, also noted the potentially far-reaching effects of the tax.
“It would definitely erode the book market in N.L. There’s no other possible outcome, especially considering that every N.L. household will have less disposable income as a result of the 2016 budget,” she said. ‘The importance of literacy in building a strong economy is significant, and I’m certain that nobody in government would argue that point.”