Premier Susan Holt says the federal tax holiday on some goods announced Thursday could cost New Brunswick $62 million in revenue.
“We’re trying to figure out what this means,” Holt said on Information Morning Fredericton on Friday.
The development came a week after New Brunswick released an update forecasting a deficit of $92.1 million for the 2024-25 fiscal year.
Prime Minister Justin Trudeau announced a two-month tax holiday on a list of goods Thursday that would run from Dec. 14 to Feb. 15, 2025.
“That was a surprise,” Holt said about the announcement made with about a day’s notice.
New Brunswick is one of five provinces with a harmonized sales tax, a combination of a federal and provincial tax on goods and services. The federal government collects the revenue and sends the provincial portion to the province.
On Thursday, a spokesperson for Finance Minister Chrystia Freeland said that if the tax-break plan goes ahead, the entire HST would be removed.
Prime Minister Justin Trudeau and Deputy Prime Minister Chrystia Freeland visit Vince’s Market, a grocery store in Sharon, Ont., on Nov. 21. (Chris Young/Canadian Press)
Holt said the lost tax revenue can’t be made up through finding “efficiencies” in the budget.
She said New Brunswick will be talking to the federal government about how it will offset the cost.
“We can’t take a $62-million unexpected hit to our budget,” Holt said. “So I’m optimistic that the federal government will help keep us whole.”
Dominic LeBlanc, the federal intergovernmental affairs and public safety minister, speaking with Radio-Canada on Friday. (Patrick Lacelle/Radio-Canada)
Dominic LeBlanc, the federal intergovernmental affairs minister and Beauséjour MP, told Radio-Canada’s La matinale radio program on Friday that he realizes it’s complicated for provincial budgets.
LeBlanc said the federal government will work with provinces on the issue.
The potential loss in tax revenue comes as a new government has pledged to implement several multimillion-dollar programs.
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.