N.S. Liberals pledge two percentage point cut to harmonized sales tax if elected

HALIFAX — Nova Scotia’s Liberal leader is committing to cut the provincial portion of the harmonized sales tax by two percentage points if his party wins the next general election.

In a speech Friday night to Liberal delegates at the party’s annual general meeting, Zach Churchill said he is making the pledge because of “seriously challenging” times for Nova Scotians.

He told delegates the measure would drop the sales tax to 13 per cent from 15 per cent, making it the lowest in Atlantic Canada.

In an interview Friday, Churchill said it’s estimated the tax cut would put an average of $650 a year in the pockets of each taxpayer, and $1,300 for a two-person household.

However, the tax cut would reduce provincial revenues by about $500 million on an annual budget of about $14.5 billion.

Churchill argues that increasing tax revenues from the HST and federal transfers make the tax reduction possible.

“The Nova Scotia government has been collecting more and more money over the last two years out of people’s pockets from their income tax and the goods and services they pay for, and we really think that we’re in a very strong position to reduce taxes and get some of that money back to Nova Scotians in a responsible way,” he said in the interview.

The next general election in Nova Scotia is expected in July 2025.  

Premier Tim Houston — who was attending the Progressive Conservative Party’s annual meeting — told reporters Saturday that while inflation is creating problems for Nova Scotians, the Liberals’ proposed reduction of the HST would require cutting government programs.

“We’re looking at ways in supporting Nova Scotians, including looking at tax relief, but a significant blanket cut like that, I’d be asking (the Liberals), ‘How are they going to fund that, and what else are they going to cut?'” 

The Opposition leader said that in his travels around the province he’s met students who can’t buy groceries, seniors who can’t keep up with the costs of maintaining their homes, and immigrants forced to move from one hotel to another because of high rents.

The party leader said that despite the rapid levels of population and economic growth in Nova Scotia, the province is “in the midst of the greatest economic shock of our lifetime” and “high levels of economic uncertainty.” 

Churchill also pointed to a 14 per cent increase in two years in power rates, rising rental costs, record inflation, and rising property taxes.

Meanwhile, the province has frozen the level of income assistance and reduced heating rebates.

This report by The Canadian Press was first published Feb. 10, 2024.

Michael Tutton, The Canadian Press