News Release Archive

Nova Scotia municipalities worried about the impact of new taxes
on vehicle purchases are being given some relief, Finance
Minister Bill Gillis announced today.

"Municipalities will enjoy an exemption with respect to the two
percent transition tax," Mr. Gillis said. "I believe any
additional burden to this sector is not warranted," he added.

Last week, the Finance Department announced that the new tax rate
on both new and used vehicles and mobile heavy equipment would 
effectively be 17 per cent on April 1, 1997, in most cases, down
from the current 18.77 per cent now. The taxes include a 15 per
cent HST and a 2 per cent transitional tax which falls to 1 per
cent April 1, 1998 and disappears entirely on April 1, 1999.
Municipalities, however, will only pay the HST.

Mr. Gillis said the Union of Nova Scotia Municipalities felt the
transition tax on new vehicles would increase the cost of
governing by several hundred thousand dollars collectively for
municipalities across the province.

"The transition tax was meant to balance auto and heavy equipment
industry concerns that vehicle sales would stop in the months
leading up to harmonization, as customers awaited the benefit of
lower taxes," the minister said.

He said it was not meant to have a negative impact on

A letter has gone out from the minister to the municipalities
explaining the decision. Some groups that continue to be exempt
from the transitional tax include forestry companies, farmers and
the non-renewable resource industry.


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

trp                      Feb. 17, 1997 - 4:30 p.m.