Currently under the taxation system, homes, new or old are taxed with merely the 5 per cent GST. Under the newly proposed HST, PEI residents will pay 14 per cent on new builds. This has some contractors concerned that the demand for new homes and developments will decrease greatly. According to Finance Minister Wes Sheridan, the rebates on the building supplies and labour costs should encourage builders and outweigh the cons of the new taxation system. Sheridan is encouraging builders to pass along the savings to the buyers in an effort to continue to boost the economy. Analysts however, suggest that even with passing along the savings gained in rebates through the new system, homes are expected to increase in price by approximately 3 per cent-still making the cost of new homes increase.

And while this anticipated slump in the contractor industry looks like a carbon copy of the slump experienced in British Columbia, one thing is different: Islanders will be exempt from paying HST on the purchase price of older homes, only paying it on the realtor’s fees. Even with the slight difference though, PEI residents will not get the same rebates that BC residents received up to a threshold amount paid on new homes. This is something that Sheridan is hoping will be discussed with the introduction of the HST next year.

Islanders will still pay tax on the same items under the GST but will now be forced to pay taxes on additional items such as electricity. Some exempt items include: children’s clothing and footwear and home heating oil. To help with the transition, the provincial government will be offering low-income residents a rebate of $150 to $200 a year for those who gross less than $55,000 annually-a similar rebate that was given by the Ontario and British Columbia governments. The rebate will assist families and individuals in the lower income bracket which currently accounts for approximately 42 per cent of the island’s residents. Over the course of the next two years the PEI government will be receiving federal funding of $39 million in transitional funding to help with the shift to the new system.

Sheridan is confident that the introduction of the new taxation system will spur on the growth in the private sector portion of the economy and bring in much needed revenue for the province-revenue that is required to boost the financial state of PEI as a whole. The proposed taxation model is also thought to help encourage investment, decrease administrative difficulties and put PEI back on the corporate map.

On April 1, 2012 the new HST rebate will be put into effect on new homes purchased up to $850,000. Raising the eligible purchase price for the rebate encompasses 90 per cent of all new homes built. Buyers will be able to apply for a rebate of up to $42,500 based on the purchase price of the home. Homes that are purchased after the HST is removed on April 1, 2013 but were built prior to the removal date will be subject to a two per cent transition tax on the price of the home. President of the Independent Contractors and Builders Association of BC Phil Hochstein, is happy with the announcement and believes the new adjustments new home purchases are well-thought out.  Hochstein is confident that the changes will help jump start the industry and encourage construction projects.

And while the housing and construction industry see sunny skies ahead, the renovation industry still fears there will be people holding back on renovation projects until the HST is officially revoked. In an attempt to save taxes, it has been reported that people are paying for renovations in cash and making shady deals or putting off projects altogether. Homebuilder’s Association leaders are calling for the province to make changes to the renovation sector in the way of tax breaks in order to stimulate all aspects of the housing industry. Whether or not this will become a reality on the tails of the recent housing announcement is yet to be seen.

The bill to remove HST from hydro bills was first introduced in November of last year to parliament and was passed at two separate readings, the latter taking place on November 24, 2011. Liberal party leader Premier Dalton McGuinty had concerns regarding the bill stating that it was difficult for his minority party to keep the budget in order without trying to secure additional funding for other propositions. And although the bill had support from both the Tories and the NDP party, Liberals are still able to defeat the bill by refusing to call for it in a final reading; the Liberals are now exercising this right.

Earlier last week, it was confirmed that the Liberal party is planning to do everything possible to keep the bill from making it through a third and final reading. NDP MPP Mike Mantha of Northern Ontario is calling the move “disrespectful” towards the voters who elected all the leaders into power. Mantha called upon the Minister of Energy to explain the reasons behind the disregard for the bill and apparent lack of support for Ontario families.

NDP leader Andrea Howarth shared in the sentiments of her colleague back in November grasping to understand why McGuinty found ways to give corporations millions in tax credits but continued to tax families. According to McGuinty, a home tax credit for seniors, a plan introduced by the Liberals in place of an HST cut, not only creates jobs but gives seniors a much needed break. Cutting the HST on heating bills merely costs the government $350 million a year in revenue-a cut the Liberals are reluctant to embrace.  Moving forward, families and seniors will continue to feel the effects of the HST on heating bills as the Liberals continue with their cool reception towards the bill.

Residents of provinces that have adopted the HST have most likely experienced an automatic harmonized sales tax applied to products that are ordered or shipped to their residences. What is not as readily experienced or known is that residences of provinces that have not adopted the HST will have to pay the additional tax when shipping domestic goods to any of the participating provinces. For example, if an Alberta resident ships a package to a resident in Ontario, they will be charged HST.

This tax regulation has residents of non-HST adopting provinces frustrated-with reason. While provinces may not have adopted the tax, residents are still paying for the decision that other provinces made. According to the federal Excise Tax Act if the province of destination applies HST, the goods shipped will be taxed accordingly. Similarly, if the goods are shipped to a province where only GST applies, only GST will be charged. The Act also applies to brokering services. If the goods come through a province where HST is applied, HST must be paid and is added to the cost of the goods.

While lawmakers see logic in the way taxes are charged, the Act still leaves most consumers scratching their heads as to the rhyme or reason behind when the dreaded tax is applied and where. And although the controversial tax was outlawed in British Columbia, residents across the country will continue to pay as long as shipments are made to Ontario and Atlantic provinces.

According to recent reports, retailers saw a surge of sales on Boxing Day by BC residents. It was anticipated that because of an overall low-consumer confidence that sales would decrease but as Wynne Powell, CEO of London Drugs Richmond stores assessed, the economy as a whole continues to gain strength “[...] but people have been lacking confidence to spend money.”

Big chain stores such as Best Buy also saw increases on Boxing Day and saw strong sales throughout the month of December leading up to Boxing Day week.

And while store owners were enjoying an influx in sales, mobile traffic for online retailers saw more than a 100 per cent increase over last year. With the surge in purchasing iPads in 2011, online shopping increased generating 7 per cent of online sales just on iPads. Other mobile traffic was up by 18 per cent overall. Moneris reports transactions were up 6 per cent from last year encompassing debit and credit transactions.

Restaurants also served more guests than last year over the holiday season despite the HST controversy applied to bills. The combination of large Christmas parties and out of town visitors to restaurants especially in larger centers was felt especially in the urban areas.

Although sales were strong in BC over the holidays as consumers continued to enjoy sales even after Boxing week, retailers are expecting the normal two-month slump in consumer spending in 2012. As a means of combating the usual January to February slump many restaurants are instituting meal deals while retailers are bringing in promotions and new merchandise to entice consumers. Most store owners anticipate that sales will be down until Valentine’s Day and have planned accordingly.

Despite the HST in British Columbia, residents made up 28 per cent of Boxing Day sales across the country.

According to the Stop Smart Meters group based in Nanaimo, the new smart meters have been reported to have adverse health effects due to exposure to the electromagnetic radiation emitted by the devices. This is cause for concern for BC residents as BC Hydro is moving forward with the initiative without any consent from the people.

For some, the move is too close to the way the HST was handled by the provincial government-with no democratic steps taken. Watching Ontario residents fight the smart meter battle with the HST tacked onto energy costs has Nanaimo residents riled up to fight a similar fight. The group is also taking further steps by making an official petition to the government under the BC Recall and Initiative Act in order to reverse the decision of BC Hydro to install smart meters. Starting with more than 15, 000 signatures, Citizens for Safe Technology has also joined the fight and is looking to collect more than 100,000 signatures by February 2012. They have already approached Energy Minister Rich Coleman to stop the smart meter program until such time as the BC Utilities Commission can make an official review of the program.

At the other end of the country, year-end reports from Ontario have confirmed that residents are paying more for their electricity than before the installation of the meters and with the addition of the HST, residents are struggling to keep up with bills. Furthermore, both Ontario and BC residents are leery of the implications that an invasion of privacy will take place due to the data that the wireless meters collects. The data collected includes the amount of power used, a breakdown of when residents are at home, and other personal data of hydro usage which potentially could be leaked to parties with malicious intent.

In order for the smart meters to be outlawed, signatures from more than 10 per cent of registered voters must be collected before forming an official question to the government. At that time, a referendum vote just like the HST can be held but not until 2013 according to laws in BC. Signatures are being collected online for the petition at the main Stop Smart Meters website.

After a recent deficit projection was made by the provincial government reporting BC’s deficit to rise to a whopping $3.1 billion for 2011-2012, Premier Christy Clark put in a formal request to the federal government for a reduction of the amount owed. Premier Clark is hoping that the government will take the province’s “tight fiscal circumstances” into consideration and ascertain the necessity of balancing the books before making any formal decisions in the matter. According to federal sources however, the Stephen Harper government is not looking to reduce the amount owed by the province of BC.

Premier Clark is seeking credit for the time that the HST was in place (nearly 2 1/2 years once the HST is abolished in 2013) as well as an extended repayment period in order to pay back the remaining balance.

Put in effect on July 1, 2010, the HST, a combination of the provincial sales tax (PST) and government sales tax (GST) was to remain in effect for five years following the receipt of the $1.6 billion given as transitional aid to the province to assist with the changeover.

Federal sources have yet to comment on the extension of the repayment period.

New Brunswick, already at a 13 per cent Harmonized Sales Tax rate is one of the highest in the country. And although Premier Alward stated that the issues are not currently on the party’s agenda, he is refusing to rule out the possibility of having to raise the HST rate and implement tolls. This is all in response to the looming provincial deficit projected at $546 million.

According to New Brunswick’s Taxpayer Protection Act, Alward would be obligated to call an official referendum should he begin the process of raising the HST rate for the province. Even though this would directly go against Alward’s platform, other leaders are not surprised at the recent talks regarding a referendum.

Liberal leader Victor Boudreau expects that the province may see the referendum question added to the municipal ballots in six months’ time as it would be the economical approach to addressing the issue. While Boudreau is not surprised at the direction of Alward’s leadership, he maintains that raising taxes should be a last resort to addressing the province’s growing deficit and debt. According to Boudreau, jobs should be created, investors should be attracted and then finally, taxes should be addressed.

Municipal elections in New Brunswick are scheduled to take place in mid-May of 2012 when the province could be headed into a referendum vote in conjunction with elections.

A major debate in the recent Provincial election, removing the HST from heating costs has created tensions in Parliament and has led to a bill being introduced to address the issue.  MPP Michael Mantha who represents Northern Ontario constituents was the one responsible for bringing the bill to Parliament in hopes that it would bring about changes.

In a close vote of 54-50, all PC and NDP members of Parliament voted the bill through a second time.  While this has encouraged some MPPs the provincial Liberals have adamantly expressed their displeasure and vowed to vote down the bill before it becomes law.  According to provincial Finance Minister Dwight Duncan, the Liberals have already determined not to call the bill for a third time which will ensure its failure.  And in a recent statement, Duncan declared that in order to have the bill passed, the NDP and PC MPPs would have to defeat the government thus, calling another election.

The proposed bill would trim approximately $150-300 annually from Ontarians heating bills but ultimately cost the province $350 million a year from removing the 8 per cent from heating bills.

While Premier McGuinty stated that the bill is “[...] not a bad idea in and of itself” he is concerned with how the province would make up the $350 million.  McGuinty also believes that cutting the HST from heating bills is not necessarily the wisest course of action given the current provincial deficit of $16 billion.  The primary focus of the Liberal government is to address the needs of seniors by introducing and implementing $1,500 annual home renovation credit.  This plan is geared towards giving citizens a break on the cost of living and allowing seniors to live in their homes longer because of implemented home improvements such as wheelchair ramps.  According to McGuinty, if passed, the plan would stimulate the economy creating more than 10,000 jobs and generating $800 million in the construction industry.

It is clear that McGuinty and the Liberals will continue to focus their energy on other issues not surrounding the HST.