Proposed HST hike gets little traction on P.E.I.

There are conflicting opinions about whether the P.E.I. government shouldhike theHST from14 to 15 per cent, butP.E.I.Finance MinisterAllenRoach has made it clear he'snot committing to the idea.

On Wednesday,Nova Scotia PremierStephen McNeil ignited the debate on the adoptionof a single harmonized sales taxof 15 per cent for all of Atlantic Canada.

"There's been no decisions made on anything to this point ...there's been no talk about it at this point," said Roach.

"Again that would be presupposing what we're going to hear from Islanders and I won't do that. I want to hear from Islanders first," said Roach.

Roach plans todelivera balanced budget this spring andwill to do that by getting spending under control, he said.

DarleneCompton,P.E.I.'s Opposition finance critic,saidthe governmentneeds to be clear with Islanders about anyplans for the HST.

Raising the HST would hurt Islanders by taking more money out of their pockets, Compton believes.

"You know, the increased cost of food, the cost of living, the fact we've got a number of people home from the west without jobs ...Islanders cannot afford it," she said.

The Canadian Federation of Independent Business on the Island is also speaking out against the idea of a 15 per cent HST.

"Certainly consumers took a really big hit when [the HST]was implemented a few years ago," said federation executive directorErinMcGrath-Gaudet.

"To ask for more money out of the economy right now would be really troublesome for the economy as a whole."

Others argue it makes sense for provinces to rely on sales taxes for revenue andthere is "a lot to be said" abouta common HSTsaidFinnPoschmann, president and chief executive officerof the Atlantic Provinces Economic Council.

"It helps the government balance its books and avoid debt from growing, and all of us are on the hook for the debt that our governments incur," saysPoschmann.

APEC saidin its annual reportanHST increase would be positivefor the Island, allowing the provinceto index its income tax rates to inflation to stop so-called bracket creep.

JimSentance, an economistat theUniversity of Prince Edward Island, estimated that with a hike of just one per cent in the HST, the P.E.I. government'srevenues would increaseby$28 million.

The government's next pre-budget consultation is scheduled for Feb. 4inSummerside.