News Release Archive


The provincial government wants to sit down with Nova Scotia's
municipalities and work out an arrangement to offset any adverse
impact of sales tax reform on the municipalities.

Finance Minister Bill Gillis said the province and the Union of
Nova Scotia Municipalities spent a great deal of time over the
summer working out the impact of a harmonized sales tax on the

"We should now spend the next two months working out ways to
offset any cost increase the municipalities might bear," Dr.
Gillis said.

Over the summer the province and the municipalities agreed that
the initial impact of tax harmonization on municipal units is
about $10.8 million.

"However," Dr. Gillis said, "this number did not take into account
any of the savings the municipalities might be expected to
receive from lower business costs."

The municipalities agreed that costs would go down in competitive
bidding situations, especially construction costs. The two levels
of government did not agree on the amount of expected savings,
with the province suggesting the net impact of harmonization
would be in the range of $6 million, while the municipalities
feel the amount is closer to $8 million.

The Finance Minister said the problem will not be solved within
the harmonized sales tax system, but the government can work with
municipalities to find other ways to either reduce costs or
increase revenues.

"Now that work has been done on discovering the extent of the
problem, we should move quickly to find solutions . . . setting a
60-day deadline (for the talks) will allow both parties to plan
properly in time for their budgets next spring," he said.


Contact: Bruce Cameron  902-424-8787

trp                      Oct. 08, 1996 - 3:20 p.m.