New Brunswick

N.B. Common Front for Social Justice says sales tax affects the poor

A group that focuses on reducing poverty in New Brunswick says increasing the Harmonized Sales Tax would have a disproportionate effect on the working poor and people receiving social assistance.

A group that focuses on reducing poverty in New Brunswick says increasing the Harmonized Sales Tax would have a disproportionate effect on the working poor and people receiving social assistance.

Instead, the N.B. Common Front for Social Justice is asking the government to consider raising the provincial portion of income tax for people earning between $39,305 and $149,999. Those earning $150,000 and above are already affected by a promised Liberal income tax hike.

On Friday, Finance Minister Roger Melanson introduced a bill in the legislature to repeal several laws, including the Taxpayer Protection Act which prohibits raising the provincial share of the HST without a referendum.

Melanson has not said the government will increase the tax which applies to the purchase of consumer items, only that the legislature should have the ability to do so without triggering a vote.

Currently the HST sits at 13 per cent in New Brunswick. The federal government collects five per cent while the provincial portion of the tax is pegged at eight per cent.

Impact not the same

Since coming to power in 2006 the federal Conservative party has cut their share, the GST, by two per cent. The overall HST in New Brunswick used to be 15 per cent.

"With any increase in the HST, it means that workers in this province who are at low salary will pay the same amount of consumption tax (HST) as those who are making $100,000, but the impact on their ability to pay is certainly not the same," said Pauline Richard, co-chair of the Common Front for Social Justice. 

Using figures from the provincial finance department, the N.B. Common Front for Social Justice estimates raising the HST one per cent would generate $140 million in 2015.

Increasing income tax by one per cent, and including the promised new brackets for wealthy individuals would instead bring in $149.6 million. 

The Common Front also supports raising corporate tax, and levies on tobacco and gasoline over an increase to the HST.

The group presented their proposal to the New Brunswick government during recent consultations aimed at soliciting citizen feedback on reducing debt and deficit in the province.

A representative told CBC they plan to submit a detailed document on the idea in the near future.