Nova Scotia Announces It Will Increase HST Rate by 2% For July 1, 2010
On April 6, 2010, the New Democratic Party in Nova Scotia has announced that it will increase the provincial component HST rate by 2% by July 1, 2010 (when Ontario and British Columbia harmonize). This will result in Nova Scotia having a combined GST/HST rate of 5% + 10% = 15% (the highest in Canada). The Nova Scotia NDP government expects this will mean $214.8 million in much-needed revenue this year.
In that same article, CBCnews reports that the increase in the HST rate is intended to bring the Nova Scotia budget into a balanced state within 4 years. At least, this is what the politicians are telling the electorate and consumers who will be paying more on almost everything.
Nova Scotia joined the HST Zone in 1997 and the consumers have adjusted to the HST regime. That being said, with Ontario and British Columbia joining the HST Zone on July 1, 2010, the Department of Finance has announced new place of supply rules for all in the HST Zone (and outside the HST Zone). We continue to wait for the HST place of supply rules to be announced in a legislative format (i.e., regulations or a Bill). The updated place of supply rules are game changers for services and intangible property and there are notable changes for real property and goods. Nova Scotia, therefore, will be adjusting to the new rules while increasing the cost of mistakes to 15%.
Cyndee Todgham Cherniak is counsel to and in affiliation with the International Trade Law and the Tax Law (Commodity Tax
