AMHERST - Cumberland County's auto retailers are asking Finance Minister Graham Steele to reconsider any plans to increase the HST in Nova Scotia to help fight the province's spiralling deficit.
In an open letter to the minister, included in a full-page advertisement in Monday's edition of the Amherst Daily News, the seven auto retailers tell the minister an increase to the HST would be a disastrous move on the part of government.
"We are in an extremely vulnerable position due to our geographic location on the Nova Scotia-New Brunswick border," association president Don Furlong said in the ad. "This proposed rate increase will take away retail sales from all our stores as Wesmorland County is included in our area of responsibility for our national franchise partners."
Furlong said retailers are concerned the tax increase would be "one more nail in the retailers' coffins that we are not open for business with our neighbours."
On Monday, Jim Hatheway of Jim Hatheway Ford Sales Ltd., said as much as 40 per cent of his company's business comes from the New Brunswick side of the border and many other dealerships have similar numbers.
Under the tax structure, purchasers pay the HST in the province of purchase unless the vehicle is delivered elsewhere. If someone from New Brunswick buys a vehicle from a Cumberland County car dealer who delivers it to New Brunswick, the purchaser will pay the New Brunswick tax.
"That's going to add to our bottom line having to deliver vehicles to New Brunswick, but it goes much deeper than that," said Hatheway. "People will have to pay the Nova Scotia tax on all their service and purchases at the dealership."
While there might not be any advantage to someone from Nova Scotia purchasing a vehicle in New Brunswick, the perceived advantage could lead some from this side of the border to the other side.
Complicating matters is the fact areas of Westmorland County from Cape Tormentine, to Port Elgin, Dorchester and Sackville, are part of the local dealers coverage area.
Steele, in Amherst last night for the Back to Balance consultations, said the auto retailers raise a good point and it's something his department needs to think about if it raises the HST.
"It's an aspect I never thought of, the fact there may be franchise owners covering both Cumberland and Westmorland counties," Steele said.
"If we were going to raise the HST, we would definitely have to look at this. I'm not interested in hurting business and of all the places in Nova Scotia that have legitimate issues that need to be addressed, Cumberland County would be at the top of the list."
Angus Furlong of Scotia Hyundai is concerned with how the tax increase could hinder business in general.
"We have customers that come to Amherst to shop and they're not going to pay more tax here than they do there," he said. "They'll stay in New Brunswick and we'll all lose that business."
Furlong said a lot of people from areas such as Shediac and Cap-Pele prefer to come to Amherst because they prefer shopping in a small town as opposed to battling traffic in Moncton. But to save two per cent they would probably stop coming to Amherst.
At the same time, people in Cumberland County would likely begin crossing the border in greater numbers. Angus Furlong is not sure how this would play out in his numbers, but he can't see it helping.
dcole@amherstdaily.com
