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George Sweeney, MHA for the District of Carbonear-Harbour Grace and
Opposition Critic for Government Services, is once again urging government
to erase the tax on insurance and not to wait until the completion of a
provincial fee review. The federal government recently reduced the GST
portion of the HST from seven percent to six on all goods and services. The
provincial government, however, indicated that it would not even reduce the
15 percent tax on insurance premiums and on the resale of used cars that it
imposes. Government argued that the tax is not a HST or a GST and as such,
was not subject to the federal reduction.
"I find it ironic that in the press statement welcoming the federal tax
break as good news since it will mean more money in the pockets of
Newfoundlanders and Labradorians, this same government states it does not
intend to even allow this same minuscule tax break on high insurance
premiums and on the resale of cars," said Sweeney. "Canadians are now paying
less for purchased goods and services, except in our province where we are
still being asked to pay the extra on costly insurance premiums and every
time we purchase a used vehicle. Since it now has the fiscal flexibility,
government should be taking action and relieving consumers and small
business owners from this huge burden. At the very least, they should begin
phase out of this special tax as Ontario did in 2000-2004.
"While the news of a fee review is a positive step, it is still uncertain
whether this evaluation will lead to any significant tax breaks for people
across our province. We saw in the 2006 provincial budget, government
boasting the elimination of 34 fees, which when analysed, was mostly
inconsequential to the average citizen since these fees related to such
items as polar bear licenses. Furthermore, government provided no commitment
to a time line for implementation or to how much it was willing to commit to
this reduction process. Engaging in fluff public relations without
substantial follow through on its intended policies is starting to become a
hallmark of this government."
Sweeney says it is his understanding that eight other provinces have
already eliminated this tax gouging. Businesses in this province are,
therefore, placed at a competitive disadvantage. "If we are going to create
much-needed jobs in this province, and stem the out-migration wave, we need
to establish a reasonable tax regime that is fair to the public and
encourages the growth of small business. This will certainly be a test to
see if the new minister of business can convince his colleagues that
delivering this tax relief would just the kind of break consumers and small
businesses could use right now to reinvest in our economy."
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