SUMMERSIDE - Municipalities across Prince Edward Island are seeking a bigger share of the Harmonized Sales Tax collected from them by the province.
© Mike Carson/Journal Pioneer
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.
âThe HST has been a bone of contention especially to the larger municipalities,â MacDougall said. âIf you take last year, the amount of HST we spent versus the amount we got back is probably close, although, we didnât 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.
âFor the City of Summerside, itâs a $300,000 maximum,â he said.
MacDougall said in 2014, more infrastructure dollars are being spent and the HST could easily top $600,000.
âMunicipalities have been saying we need to be compensated a larger portion of the HST,â he said. âIf a municipality is spending X amount of dollars at 14 per cent, thereâs nine per cent of that which is HST and five per cent, which is basically the old GST, and weâre only getting back that five per cent. It has been an issue right from the beginning...and weâll continue to ask for that back because itâs not only fair, itâs something that should be. Itâs a big chunk of change and it would make a difference.â
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.