In 1997 New Brunswick, Nova Scotia and Newfoundland all implemented HST. A report conducted by the CD Howe Institute explained that initially the implementation of the Harmonized Sales Tax led to an increase in capital investment by businesses in New Brunswick, Nova Scotia and Newfoundland. On a corporate scale the HST seemingly brought in an influx of revenue and it was reported that consumer prices fell 1% with the introduction of the harmonized taxation system. For the Atlantic provinces who were already accustomed to paying PST on restaurant foods and other services, the transition was not as drastic as those consumers in Ontario and BC who experienced a shock when faced with having to pay for services that previously were not taxed.
One of the biggest changes to note in the Atlantic provinces was the removal of paying PST on multiple levels (e.g. the consumers paid on end products, businesses paid PST on essential business operational costs and additional costs were embedded into the pricing). There is also now a refund structure in place which then allows businesses to pass along the savings to their customers.
Since 1997, New Brunswick (13%), Nova Scotia (15%) and Newfoundland(13%) have kept the HST system in place. Prince Edward Island only recently has announced their move to adopt an HST system beginning on April 1, 2013 which ironically is the same date that British Columbia is scheduled to revert back to their old system of PST/GST. Protests and petitions are being organized in PEI in response to the announcement, modelling after British Columbia’s Fight HST movement that resulted in the overthrowing of the harmonized system.