Information Morning - Moncton 21:45

 Premier Susan Holt takes your questions

 

The premier reflects on her first month in office and takes questions from New Brunswickers about their concerns.

Retention pay for nurses is expected to cost $74 million, some of which Holt has said was already budgeted. A planned 10 per cent rebate on power bills will cost another $90 million, she said.

The tax revenue loss, and the spending promises, were raised in the legislature Friday.

"So now we have a government that's said we're going to keep all of our commitments, and we're going to balance the books," Opposition Leader Glen Savoie said. "So what is going to have to remove in order to live up to that commitment?"

He later asked if Holt would abandon the promised power rebate. 

"We made a commitment to New Brunswickers and they elected our team in record numbers," Holt said in response. 

A federally-imposed "tax holiday" could end up being costly for some provinces, and officials from two provincial governments said they were "blindsided" by the prime minister's announcement Thursday that the federal government is suspending the sales tax for some goods.

On Thursday, Prime Minister Justin Trudeau said he would seek to lift the GST and HST from some goods until mid-February in a bid to alleviate some of the affordability pressures people have been experiencing in the post-pandemic era.

Five Canadian provinces have a harmonized sales tax — a combination of provincial and federal taxes on goods and services administered by the federal government. Ottawa sends the provincial portion of the sales tax back to the respective provinces.

But officials from two provinces say they were given less than 24 hours' notice that the entire sales tax would be removed.

They also said it's not clear whether they'll receive any compensation from the federal government for the lost tax revenue.

Representatives of two provincial governments with HSTs spoke to CBC News on the condition that neither they nor their provinces be identified because of the sensitivity of the issue.

Responses vary by province

Newfoundland and Labrador Premier Andrew Furey endorsed the federal plan for the "tax vacation" out of the gates.  

Furey, who is one of just two Liberal premiers in the country, said on the social media platform X he welcomed the proposal to remove the HST from many goods and services for two months.

New Brunswick Premier Susan Holt was more circumspect.

"We're trying to understand what it is, what it might cost," Holt said Thursday. "Is this something where we're going to be sacrificing provincial tax revenue, so it's going to be a hit on provincial revenues in this fiscal year?"

Ontario already has eliminated the provincial portion of the HST from some of the goods proposed for the federal tax vacation, including children's clothing, shoes, diapers, books and newspapers.

In a media statement, Premier Doug Ford's office said "the best thing the Liberal government can do right now is ditch, or at the very least pause, any hike in the carbon tax which is set to increase for the sixth time on April 1."

Prince Edward Island did not immediately respond to a request for comment.

Prime Minister Justin Trudeau announced Thursday a suite of new measures meant to alleviate some of the affordability pressures people have been experiencing in the post-COVID era — including a two-month GST holiday on some goods and services.

The Liberal government will also send $250 cheques to the 18.7 million people in Canada who worked in 2023 and earned $150,000 or less.

Those cheques, which the government is calling the "Working Canadians Rebate," will arrive sometime in "early spring 2025," Trudeau said.

People will be able to buy the following goods GST-free:

• Prepared foods, including vegetable trays, pre-made meals and salads, and sandwiches.
• Restaurant meals, whether dine-in, takeout or delivery.
• Snacks, including chips, candy and granola bars.
• Beer, wine, cider and pre-mixed alcoholic beverages below 7 per cent alcohol by volume (ABV).
• Children's clothing and footwear, car seats and diapers.
• Children's toys, such as board games, dolls and video game consoles.
• Books, print newspapers and puzzles for all ages.
• Christmas trees.

With these exemptions, all food in Canada will be essentially tax-free.

"For two months, Canadians are going to get a real break on everything they do," Trudeau said at a media event in Newmarket, Ont.

"Our government can't set prices at the checkout but we can put more money in peoples' pockets. That's going to give people the relief they need. People are squeezed and we're there to help."

If a family spends $2,000 on the eligible goods in the two-month period, they can expect to save about $100, according to government figures.

In provinces with the HST — where the GST is harmonized with provincial sales tax — the savings will be larger, the government said.

Provinces with the HST include Ontario, Newfoundland and Labrador, Nova Scotia, New Brunswick and Prince Edward Island.

Prime Minister Justin Trudeau visits Vince’s Market, a grocery store in Sharon, Ontario, on Nov. 21, 2024. (Chris Young/Canadian Press)

In Ontario, for example, the same $2,000 basket of eligible purchases will result in estimated savings of $260 over the two-month period, the government said.

These savings will come with a big price tag for the federal government.

The two affordability measures come as the government grapples with persistent unpopularity in the polls and after two stinging defeats in recent byelections.

The CBC's Poll Tracker suggests Trudeau's Liberals are about 17 percentage points back from the first-place Conservatives. That gap has narrowed somewhat in recent weeks.

The renewed focus on the cost of living is designed to bolster the government's support among people who have been feeling the pinch after prices on almost everything have increased in recent years due to inflation.

But there's a risk this new stimulus could juice inflation, which has only recently come down to the Bank of Canada's two per cent target.

Economists agree that unprecedented government stimulus around the world during the pandemic contributed, in part, to elevated inflation as consumers flush with cash chased scarce goods.

The Bank of Canada also has said that if Ottawa had pulled back on COVID-related stimulus earlier, inflation likely would not have been as bad as it has been.

Trudeau announces GST break, $250 rebates for over 18M Canadians

Justin Trudeau’s Liberal government has announced a temporary GST pause on some goods, along with $250 rebate cheques for Canadians earning less than $150,000. The NDP backs the move, but some experts worry it could reignite inflation.

This measure would deprive the government of $5 billion in tax revenues each year, the NDP estimates, and would be offset by revenues from a proposed tax on excessive corporate profits.

The NDP will support the temporary measure proposed by the Liberals, even if it is deemed insufficient.

But Singh said the party "will campaign hard on permanently scrapping the GST on daily essentials and monthly bills, like we already promised."

• Is Justin Trudeau's tax break on groceries enough? How are you cutting food costs at home? That's the first topic on Cross Country Checkup this Sunday. Leave your reply here and we may read it on the Nov. 24 show.