Municipalities want better deal on HST rebate

Mike Carson
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SUMMERSIDE  - Municipalities across Prince Edward Island are seeking a bigger share of the Harmonized Sales Tax collected from them by the province.

Deputy Mayor Bruce MacDougall says municipalities need bigger share of HST rebate.


Summerside Deputy Mayor Bruce MacDougall raised the issue with city council earlier this week saying municipalities need to be treated more equitably when it comes to sharing the HST with the province.

“The HST has been a bone of contention especially to the larger municipalities,” MacDougall said. “If you take last year, the amount of HST we spent versus the amount we got back is probably close, although, we didn’t get back all of what we had spent.

With the city entering a very busy construction season in 2014, the deputy is doubtful Summerside will receive half of the HST charged on expenditures.

The province has infrastructure fund set up that cities can apply to and get the value of HST back up to a certain amount.

“For the City of Summerside, it’s a $300,000 maximum,” he said.

MacDougall said in 2014, more infrastructure dollars are being spent and the HST could easily top $600,000.

“Municipalities have been saying we need to be compensated a larger portion of the HST,” he said. “If a municipality is spending X amount of dollars at 14 per cent, there’s nine per cent of that which is HST and five per cent, which is basically the old GST, and we’re only getting back that five per cent. It has been an issue right from the beginning...and we’ll continue to ask for that back because it’s not only fair, it’s something that should be. It’s a big chunk of change and it would make a difference.”

MacDougall said the issue surrounding the HST is separate from ongoing discussions with the province over a provincial/municipal funding formula.

That issue involves municipalities receiving money based on development. Municipalities are looking for a better deal with that formula and are looking to the province to scrap its one per cent grant policy and revert to the tax credit plan that was in place before 2008 that more fairly compensates municipalities for new development.      

Geographic location: Summerside

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Recent comments

  • don
    May 11, 2014 - 09:25

    Bruce how dare you want more money from wes. how is he suppose to help the rich liberals if he gives more money to the municipalities of this island? he needs billions over the next few years to support the family and friends of ghiz and himself. you are just being greedy.