N.B. retailers should benefit from N.S. tax increase
SACKVILLE - It's only a two per cent difference but some local business owners are hoping that might just give Nova Scotians one more reason to cross the border into Sackville to shop.
"People already drive over here (from Amherst) for gas and milk because of the significant price difference in those items," said Chris Harbourne, owner of Downtown Digital on Main Street. "So adding another two per cent on top of that should be a benefit for Sackville businesses."
The Nova Scotia government unveiled its 2010-11 budget last Tuesday, announcing plans to hike the province's HST rate this coming July from 13 to 15 per cent, making it the highest total sales tax in the country.
This move is expected to result in an increase in cross-border traffic into New Brunswick this summer, particularly an influx of shoppers who are looking for a two per cent savings on bigger-ticket items, such as TVs or home renovation materials.
And although many of those Nova Scotians will likely travel through to Moncton for their shopping, it is also hoped that Sackville will draw in some of that traffic.
For Harbourne, who recently expanded his computer store to include televisions and home theatre equipment, that is certainly good news. And what would be even better, he said, is if the New Brunswick government sticks with its promise not to raise the HST in the province.
"It would be nice to have that competitive edge," he said. "Even if it's just for a short period of time, if it gets people into the habit of coming over here, then that gives us a little bit of an in."
Kate Bredin, executive director of the Greater Sackville Chamber of Commerce, said reaction seems to be mixed within the local business community about whether the HST hike in Nova Scotia will bring more shopping dollars into the town.
For the local grocery stores, which have very few items that are taxed, not a lot of changes are expected, she said. The same goes for restaurants and cafes, because "it's too small of a difference" to expect a flood of customers.
But Bredin said the manager at the local hardware store expects to pick up some business from Nova Scotia shoppers who might be planning a do-it-yourself project or buying a shed/barn.
"He's expecting an increase in cross-border shopping but to what extent he's not sure," she said.
Bredin did note, however, that many Sackville and area residents cross the border over to Nova Scotia to do their shopping, so "it works both ways."
But she also pointed out that cheaper prices for gas, cigarettes and milk in New Brunswick does seem to be attracting more Amherst residents across the border, and Sackville is fortunate to be the first stop.
"So maybe once they're in town, they'll do a bit of extra shopping."