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N.L. government to kill the book tax

Tom Osborne.
Tom Osborne

The book tax will be eliminated on Jan. 1 of next year, Finance Minister Tom Osborne announced Tuesday afternoon at Confederation Building.

The news conference Osborne called was ostensibly about announcing a committee, which will do a comprehensive review of the tax system, and deliver recommendations to government next fall.

But the thing that drew more attention was Osborne’s announcement that the government will give notice to the federal government to eliminate the 10 percentage point provincial portion of the HST on book sales.

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The book tax has been widely derided since it was introduced in 2015, when then-finance minister Cathy Bennett raised taxes on just about everything. Critics said that taxing books was regressive, and an additional barrier to readers in a province with a less-than-stellar literacy rate.

“I never liked the book tax,” Osborne said. “When I first became minister of finance and president of treasury board, I immediately indicated that I wanted a different approach as we move forward — a balanced approach. I spoke with the premier about the book tax; he didn’t like the book tax.”

Osborne stopped short of repudiating Bennett’s approach as finance minister, but in less than a month, this is not the first big step he’s taken to strike a markedly different tone from his predecessor.

Osborne indicated that the comprehensive tax review would look at a lot of the other unpopular decisions that Bennett made.

He said that he doesn’t like the temporary “deficit reduction levy,” another creation of the 2015 budget, and he openly mused about instituting some sort of junk food tax in the province.

“I don’t want to put ideas in the committee’s head, because it is an independent committee, but maybe there’s taxes that could be eliminated,” he said. “You know, people talked about a sugar tax on soda pop or a fast food tax, are those things that are even possible?”

The committee studying the tax system is chaired by Steve Jerrett, along with Peter Woodward, Brian Bonnell, Carol Furlong and Marion Pardy

Jerrett said that the group hasn’t yet had a chance to sit down and draw up a plan of attack for the project.

“It’s a daunting task. This is not a simple project, but the the minister is correct in saying long-term fiscal situation in this province has to be paramount,” he said. “If we want to maintain reasonable levels of services, the province has to be in a strong long-term fiscal situation.”

The province is still wrestling with a deficit of around $778 million, and stubbornly low oil prices.

The end goal of the review, Osborne said is a simpler and fairer tax system.

“The tax system should be simple of the public to understand and easy for government to administer,” he said.

“We need to protect our economy, and we need to ensure that this is a place where people want to live.”

 

jmcleod@thetelegram.com

Twitter: TelegramJames

 

 

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