CBC News Tuesday, April 6, 2010
Nova Scotia's NDP government has kicked off a four-year deficit-busting plan by increasing the harmonized sales tax — making it the highest combined provincial and federal tax rate in the country. Finance Minister Graham Steele unveiled his $9-billion deficit budget on Tuesday, calling it a "smart, strategic and steady" plan necessary to tackle a painful financial outlook. The NDP expects to end 2009-10 with a deficit of $488 million. This coming year, it expects to finish $222 million in the red. "We wish the legacy of unsustainable spending we have inherited didn't exist, but it does," said Steele. "It is our responsibility to deal with it — to clean up the mess — so that Nova Scotia's future is not compromised. Doing nothing is not an option." The plan pivots around a hike in the HST, to 15 per cent from 13 per cent. Despite warnings from businesses, the NDP is raising the provincial portion by two percentage points as of July 1. The government expects this will mean $214.8 million in much-needed revenue this year. This tax hike will apply to everything except children's clothing and footwear, diapers and feminine hygiene products.
That means a tax increase of around $412 for about 128,000 households in the province with incomes between $30,000 and $60,000, provided they don't make big purchases like houses or cars. The rebate on home energy remains.
Budget 2010-11 highlights:
- Projected deficit of $222 million.
- HST rises to 15%, as of July 1.
- Rebates for people making less than $30,000.
- New tax bracket for earners of $150,000 or more.
- 1,000 civil servant jobs gone over four years.
- Debt climbs to $14 billion.
- No balanced budget until 2013.
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