In Newfoundland and Labrador’s 2015 Budget, the Conservative government announced that, effective January 1, 2016, the province would increase the provincial component of its HST to 10%, bringing the total HST rate in the province to 15%.
However, after a landslide victory by the Liberals in the provincial election held on November 30, 2015, it now appears that the pending HST increase will be cancelled. New Premier-elect, Dwight Ball, had previously announced that, if elected, his government would cancel the HST increase, and this action was included in the Liberal campaign platform. Indeed, all indications are that the newly-elected provincial government will work with the federal Department of Finance to ensure that the increase does not come into effect on January 1, 2016. As a result, the HST rate in Newfoundland and Labrador will remain at 13%.
While this change in plans might be good news for the residents of Newfoundland and Labrador, many organizations with activities in the province now face the challenge of having to reverse any accounting system changes that have been made in anticipation of the planned HST rate increase.
On Wednesday, December 9, 2015, a CBC news story quoted a statement from the federal Department of Finance that said “the federal government will take any necessary steps to ensure that the rate increase does not come into effect on January 1, 2016.”
For the full news story, see:
CBC News: HST on agenda, as Justin Trudeau meets with Dwight Ball
On Tuesday, December 15, 2015, the CRA confirmed the cancellation of the Newfoundland and Labrador HST rate increase scheduled to take place on January 1, 2016. In addition, the CRA indicated that the Government of Newfoundland and Labrador issued Tax Information Bulletin HST 001 “Cancellation of the Harmonized Sales Tax Rate Increase”, on December 14, 2015, to provide further details on the impact of this announcement. The CRA confirmation can be found at: