Advocacy & Policy
Prince Edward Island: Finance
PEI government listens to RCC: reduces Harmonized Sales Tax (HST) on printed books
November 30, 2012
Issue:
Following months of advocacy from Retail Council of Canada and its partners with the Canadian Booksellers Association, the government of Prince Edward Island (PEI) will now only charge the federal portion (5%) of the Harmonized Sales Tax (HST) on printed books. This will take place when the HST is introduced in PEI in 2013.
Background:
During the November 13, 2012 Speech from the Throne, the PEI government changed course in announcing that when the Harmonized Sales Tax is introduced in April 2013, books will now be exempt from the provincial portion of the HST. This means that the government will now charge a 5 per cent tax on books, as opposed to its original plan to charge the full 14 per cent HST.
RCC successfully lobbied the PEI government on this issue, pointing out that every province in Canada that uses the Harmonized Sales Tax has made the conscious decision to only charge five percent tax on printed books. The provincial portion of the HST is rebated to the customer at the point of sale. Without this exemption, booksellers would have been at a competitive disadvantage while it would have been administratively challenging for all retailers selling printed books.
RCC wrote to Hon. Wes Sheridan, Minister of Finance advocating that given the obvious educational and business advantages to having a lower tax on printed books, retailers would welcome a decision from the PEI government to join with the other HST provinces in Canada and only subject printed books to a five per cent tax.
RCC pointed out that since many of RCC’s Prince Edward Island members are national retailers with locations across the country, RCC has consistently encouraged the PEI Government to work with its provincial counterparts to better streamline legislation and regulation across provincial borders. RCC members are spending far too much time on the administrative burden created by inconsistent regulatory frameworks. Prince Edward Island’s 2013 implementation of the HST will bring improved tax harmonization to Atlantic Canada as all four Atlantic Provinces will have a Harmonized Sales Tax.
RCC argued that the benefits to a harmonized tax system with other Provinces are immense, in that businesses will be more productive and greater contributors to the economic strength of Prince Edward Island. Harmonized tax policies also make a province like PEI more attractive to national retailers who may be looking at expansion opportunities in PEI.
In the spirit of continued harmonization, Retail Council of Canada requested that the province of Prince Edward Island make the business friendly decision to rebate the provincial portion of the pending Harmonized Sales Tax at the point of sale and only charge five per cent tax on printed books.
Current Status:
The PEI government estimates that the HST change regarding the book exemption will result in $1.4-million a year in lost revenue.
Next Steps:
RCC will congratulate the PEI government on its decision regarding the exemption for books.
RCC will continue to monitor the implementation of the HST in PEI and continue to advocate on issues of concern to retailers.
If you have any questions or concerns, please don’t hesitate to contact Jim Cormier at jcormier@retailcouncil.org or (902) 422-4144.
