Ottawa ambiguous on compensation for provinces losing revenue from tax vacation

Unclear if N.B., P.E.I., will receive GST refund It remains unclear if New Brunswick and Prince Edward Island will get a refund for lost revenue from the proposed, temporary GST cut.

The federal government continues to be ambiguous about whether it will compensate provinces for lost revenue, following the announcement of a two-month tax vacation on certain items.

Deputy Prime Minister Chrystia Freeland side-stepped the direct question on Monday.

“Our hope is that as we talk more with premiers of provinces and territories they will recognize this is a good thing for the people who live in their province,” said Freeland.

Prime Minister Justin Trudeau similarly gave a vague answer to the same direct question on Friday.

The premiers of New Brunswick and Prince Edward Island both reported being surprised by the federal government’s announcement, made last Thursday.

“We did not get the courtesy of a call to say it was coming, or any kind of request for our input,” said P.E.I. Premier Dennis King.

King said P.E.I. expected a revenue loss of $14-million from the tax cut, while New Brunswick Premier Susan Holt said it the provincial loss would total $62-million.

Both King and Holt said they wouldn’t stand in the way of a tax cut, but would continue to seek full compensation on the lost revenue.