New home construction could get HST rebate on P.E.I.

An all-party committee of MLAs has recommended the P.E.I. government consider a rebate program to reduce the HST Islanders pay on the purchase of a new home. The province's Standing Committee on Education and Economic Development is also suggesting a rebate on HST paid on home renovations worth more than $10,000.

The recommendations come after a series of standing-room only hearings where representatives of the residential construction industry spoke about the impact of the number of housing starts in the province.

• Home builders warn against increasing HST on P.E.I.

The committee is modeling its proposed rebate on the sale of new homes on a similar program in Ontario, suggesting government rebate 75 per cent of HST payable on a new home, to a maximum of $24,000.

The committee is also calling on government to extend the current exemption on the provincial portion of the HST payable on home heating oil to other forms of home heating. None of the recommendations are binding.

"It's not excellent policy to heat with non-renewable resources," said the committee chair, Liberal MLA Bush Dumville. "But at the time [the HST was introduced], because so many Islanders heated with oil, we had to exempt oil. We all want to move toward renewable resources."

HST 'unfair' to Island residents

Meanwhile, the Official Opposition devoted all of its time in question period Wednesday to exploring the myriad ways PC MLAs feel the HST is "unfair" to Island residents.

"What our party and our caucus is seeking is fair and equal of heating sources for all Islanders," said PC economic development critic Matthew MacKay. "This government's unfair tax policy hurts all Islanders who heat without heating oil. Government has created a two-tiered HST when it comes to heating your home."

MLA Colin LaVie took on the issue of grieving families digging deeper into their pockets for the funeral of a loved one, with the HST set to increase from 14 to 15 per cent on October 1, 2016.

"How is this tax fairness for Islanders to claw even more HST from families coping with their grief?" LaVie asked.

"What we're all trying to do is show you that there's real examples of families and people out there that just can't afford another tax hit at all," said Sidney MacEwen, MLA for Morell-Mermaid. "What do you say to the people that are living paycheque to paycheque when they keep getting taxed more and more?"

Lowest rebate for charities

The Opposition also brought up Island charities, which receive the lowest HST rebate in the country at 35 per cent, and municipalities, with P.E.I. being the only province with the HST to offer them no rebate at all.

Over and over again the finance minister rose to ask the Opposition to wait until government is closer to balancing its budget.

"Our budget, as was outlined last week, makes it clear that as we continue to move forward and run closer to that balanced budget we'll be in a position to look at the taxes that affect those Islanders the most," said Finance Minister Allen Roach.

"Is the budget virtually balanced or not?" shot back LaVie, referring to government's portrayal of the budget it tabled last week as in "virtual balance" or "structurally balanced."

Roach also said taxes on household energy are being considered as part of a new provincial energy strategy, currently under development.

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