NS: Tax hike will magnify cross-border shopping issue, says MLA

[AMHERST, NS] — If the government increases the HST to bring the province’s debt under control, Cumberland South MLA Murray Scott said it runs the risk of jeopardizing businesses along the border with New Brunswick.

The veteran MLA is asking Finance Minister Graham Steele to call for an assessment of cross-border shopping and its impact on provincial tax revenue and local business.

“You just have to look at people who are purchasing things like large TVs or appliances. They are going to save a lot of money by going to New Brunswick,” said Scott. “That’s only going to get worse if you add another two per cent on the price in Nova Scotia. It makes us less competitive.”

Scott first raised the issue while speaking to the Nova Scotia Utility and Review Board during public hearings on gasoline taxes in Amherst last week. He said the issues facing Cumberland County business owners go beyond gas to other items and he’s afraid other retailers will take a hit if the HST is hiked on this side of the border.

“We’re already seeing a lot of cross border shopping with gasoline and tobacco. This is only going to compound the situation,” said Scott, adding an increase in the HST could also impact the number of New Brunswickers coming across the border to shop in places like Amherst.

Scott admitted he doesn’t have an answer to the issue, but feels that once government has an understanding of the issue it may be in a better position to help with things like tax rebates for retailers.

“We need to know how much tax revenue is being lost to New Brunswick and how many people in Amherst are shopping across the border in New Brunswick. Once we have that number, the government will be able to look at what other communities across the country have done to address it,” Scott said.

Furniture storeowner Charlie Rhindress is concerned how a tax increase could impact his business and hopes the government looks for other ways to cut the debt.

“We already face stiff competition from Moncton and this is going to make it worse,” said the owner of Bargain Bennies. “When you’re talking two per cent on the price of a recliner it can be a significant amount of money and people will drive across the border to Moncton to save that.”

Rhindress finds it hard to believe that people are willing to pay an extra two per cent in taxes and wonders if those people would still pay that if they could save two per cent by hopping in their vehicle and crossing the border.

Cumberland North MLA Brian Skabar said there is no easy solution to the cross-border shopping issue, but suggested it’s a question that can be put to the minister when he comes to Amherst on his provincial tour in a few weeks.