Higgs pledges to cut provincial sales-tax rate if re-elected
CBC
Premier Blaine Higgs, speaking as leader of the provincial Progressive Conservatives, said Thursday he'd reduce the province's harmonized sales tax to 13 per cent — if he is re-elected this year.
Higgs appeared at a news conference in Moncton, while several cabinet ministers, with Progressive Conservative candidates, gathered at three other locations across New Brunswick to make the co-ordinated election promise.
"We're able to do this because we can and because we've been fiscally responsible since we started, since the very beginning," Higgs said of the promised tax cut.
Higgs said the harmonized tax would be reduced to 14 per cent as part of the 2025 budget, then reduced to 13 per cent in 2026.
"All the while, we'll maintain our balanced budget," he said.
The writ hasn't yet been dropped, but the co-ordinated announcement appeared to be a campaign salvo by the Progressive Conservatives ahead of this year's election, which must be held by Oct. 21.
The harmonized sales tax, a federal-provincial tax created in the late 1990s, originally stood at 15 per cent, with a federal rate of seven and provincial rate of eight per cent.
The tax applies to all goods and services sold in the province, with some exceptions including basic food products and prescription drugs.
Former prime minister Stephen Harper cut the federal portion to five per cent in 2006, and in 2016, former New Brunswick premier Brian Gallant raised the provincial portion to 10, bringing the total rate back up to 15 per cent.
Following the announcement, Higgs fielded questions from reporters about why his government is waiting until after an election to reduce the tax, rather than now or in previous years.
Higgs said reducing the HST has to be legislated in a move done typically around the budget's release. He also said that doing so immediately would require businesses to make "changes in everything they do."
He added that the province previously wasn't in good enough shape fiscally to reduce the tax, referring to previous decisions by his government to delay or cancel certain capital projects early on in its mandate, coupled with budget surpluses aimed at lowering the provincial debt.
"We have a team that's focused on, on doing what's right for New Brunswick, but doing it in a way that we can prudently manage it," Higgs said.
Higgs also revealed Thursday that reducing the provincial portion of the HST by two percentage points would lower annual government revenue by about $450 million.