News Release Archive

New rules for phased in savings on new vehicle purchases
resulting from harmonization were released today by the
Department of Finance.

"The rules mean buyers and consumers purchasing a new vehicle
after April 1, will save some money," Finance Minister Bill
Gillis said.

Nova Scotia Automobile Dealers' Association executive
vice-president John Sutherland said the association believes that
harmonization is good for Nova Scotia business generally and will
be critical in positioning the province to develop a stronger
economy and job base for Nova Scotians.

"Government created these transitional tax rules to balance
industry concerns that vehicle sales would stop in the months
leading up to harmonization, and so customers can benefit from
lower taxes," Mr. Sutherland said.

"It is important that we get the message out to auto buyers that
if they hold off until April, they will save some money, but it
won't be the full 3.77 per cent right away," he said.

Mr. Gillis said another consideration was the big decrease in tax
money to the province that implementing the full HST would bring.
"We must be fiscally responsible and phasing in this tax is good
for our balance sheet."

The rules state that the tax rate on both new and used vehicles
and mobile heavy equipment effectively will be 17 per cent on
April 1, 1997, in most cases, down from the current 18.77 per
cent. The taxes include a 15 per cent HST and a two per cent
transitional tax which falls to one per cent April 1, 1998 and
disappears entirely on April 1, 1999.

The transitional tax will not apply in situations where the
purchaser was previously exempt from the Provincial Sales Tax.
The minister said this means no group or individual will see a
tax increase on a new vehicle come April 1.

The president of Nova Scotia Automobile Dealers Association, Paul
O'Regan, says offering the customer a lower price is the
objective of every automobile dealer.

"Making vehicles more affordable is good for the industry and the
customer. The APEC study on the HST in Atlantic Canada estimates
this tax will result in $20 million more in sales in this
province. A boost in business like that is always good news," Mr.
O'Regan said.

"Less tax on business will enable our members to be more
competitive. It will, no doubt, translate into a more aggressive
marketplace than we know today, with the Nova Scotia customer
being the beneficiary," Mr. O'Regan said.

"Under harmonization, the tax reduction on automobiles will
eventually drop almost four percentage points from 18.77 per cent
to 15 per cent. This tax reduction is a favorable move and will
be of dramatic assistance to our business. A similar advantage
will be realized by consumers on auto parts and service."

The Department of Finance has prepared an information brochure
and a Guide to Auto Dealers to help people understand the new
rules. They are available by calling 1-800-731-7707, or at most
Nova Scotia automobile dealers. As well, a series of ads will be
placed in newspapers across the province.


Contact: Bruce Cameron    902-424-8787 or 902-499-8849 (Cell)

         John Sutherland  902-425-2445

         Paul O'Regan     902-422-8551

trp                     Feb. 13, 1997 - 9:05 a.m.