QUESTION PERIOD — Finance
Temporary Tax Measures
November 27, 2024
Senator Gold, regarding the HST tax holiday, we have witnessed concern from provinces coast to coast. The bilateral HST agreements state in no uncertain terms that compensation entitlements exist for provinces when the revenue shortfall exceeds 1%, and so it does in this case. To date, there has been no commitment to compensation. Instead, we’ve had empty responses to media questions to brush aside concerns, particularly in my region of the Maritime provinces.
Can you explain why the federal government has not committed to its requirement to compensate the Maritime provinces for lost provincial tax revenues for the HST tax agreements due to the two-month tax holiday?
Thank you for your question. It’s an important one given the variability across the country of how taxes are collected and remitted. The government is committed to working with the provinces and is, in fact, engaged in discussions with the provinces. When that has been completed, I’m sure the government will make the appropriate announcements.
But this government is mindful of the impacts upon the provinces and the foregone revenues that might accrue, and it will continue to work with the provinces, as it does in so many other areas where the government is a partner with the provinces, whether in health care, education or other matters critical to our well-being.
I understand this initiative was developed in isolation. Considering that Premier Holt was informed less than 24 hours before the announcement of the HST/GST tax holiday, Premier King found out via press release the day of and Premier Houston was in the middle of an election at the time, how can the federal government find it reasonable to announce, on such short notice, a monumental tax change without any consultation with provinces or the merchants who are expected to implement this temporary measure within weeks?
Thank you again for your question.
The government made an announcement. There is not yet legislation, although we hope it will be introduced and passed soon. Again, the government will work with the provinces; it will be engaging with the provinces to ensure that the impacts on the provinces and their businesses are fair.
