Graham Steele says Nova Scotians might be ready to accept an increase in the HST.?The finance minister needs to tread carefully with such talk in this neck of the woods where retailers are struggling to compete with their counterparts across the border in New Brunswick.
Gas retailers have long been engaged in a losing cross-border battle with those in Aulac and Sackville, N.B., and it's the same for many convenience store owners with tobacco sales. The price of a package of cigarettes is a lot cheaper in New Brunswick while milk prices and some other groceries are also cheaper.
Now, if Steele opts to increase the HST to 15 per cent - the level before the federal Conservatives cut it one percentage point at a time to 13 per cent - there will be a two per cent difference in the harmonized tax between this province and New Brunswick. In other words, the finance minister will inadvertently give neighbouring retailers another leg up on those in Cumberland County.
Cumberland South MLA Murray Scott raised the issue a week ago when speaking to the Nova Scotia Utility and Review Board on gas prices.
He suggested the province conduct a study of cross-border shopping to determine how much tax revenue will be lost and how business will be impacted.
A study will not solve the problem, but it might provide some information on the financial hit that could be coming while giving retailers and government some ideas on how to fight back. Creating a lower tax zone in Cumberland County for retailers will create the same problem a separate zone for gas stations will. Creating an artificial border might move the problem away from the border, but it won't solve the problem.
Just as the province and the UARB might consider tax rebates for gas retailers to level the playing field, a similar initiative could help soften the blow for other retailers should government decide the need to fight the debt requires increasing the HST.