News Release Archive

April 1 will see one of the biggest changes in taxes in years,
with the introduction of the Harmonized Sales Tax (HST).

Experts say it is difficult to know what the precise impact will
be, but they agree the whole package will be good for consumers.

The Atlantic Provinces Economic Council (APEC) has been watching
the Atlantic economy for decades. APEC Economist David Armirault
said it may be hard for consumers to see lower prices immediately
but competition will make it very hard for business to hang onto

"In the first months after harmonization, some businesses will
try to hold on to their savings," he said. But soon, "businesses
will have to hand savings on to consumers, or they will lose 
market share."

Nova Scotia businesses will see a reduction in their costs
because their tax expenses are now refundable.

The price of coffee and two donuts at Tim Horton's is a good
illustration. Before the HST, the cost was $2.47, including Goods
and Services Tax (GST) and Provincial Sales Tax (PST). On April
1, the cost will be $2.38 including HST.

That's an 11 cent drop. Ten cents is a tax cut and the other
penny is Tim Horton's dropping the price of an eight ounce cup of
coffee. That daily saving adds up to more than $25 a year.

Jim Preston Atlantic Vice-President for Tim Horton's said it is
just good business.

"We wanted to look at what the final prices would be, and we
wanted to make it easier for the consumer." Mr. Preston said.

The HST will bring higher taxes on a few items, lower tax on many
items, and no change on tax-free items, like groceries and drugs.
The tax on home heating oil and gasoline as well as personal
services will increase. At the same time, the tax on everything
from telephone service to cleaning supplies, hardware items and
appliances will decrease. And starting July 1, 1997, Nova Scotia
personal income tax rates will drop by 3.4 per cent.


Contact: Bruce Cameron  902-424-8787

trp                     Mar. 27, 1997 - 5:00 p.m.