February 7, 2017
For Immediate Release

HST Overpayment News Troubling,

Minister Delays Updating People Even While Pre-Budget Consultations Ongoing

Keith Hutchings, Finance Critic for the Official Opposition, said, “The news that Newfoundland and Labrador will have to pay a significant amount of money back to the federal government this year because of a $140-million HST revenue overestimate is troubling – but just as troubling is the Ball government’s handling of the issue. The Finance Minister launched pre-Budget consultations without giving people a clear indication of the fiscal impact or what the government intends to do about it.”

“We understand that the federal finance department wrote to the province in December to state that our province’s cut of the Harmonized Sales Tax pool will drop this year to make up for overpayments. The Minister has said she wasn’t expecting the amount to be so high and budgeted $89 million. When was she made aware of overpayments? When was the amount budgeted for this fiscal year? Why was there no disclosure before the first pre-Budget consultation that the Minister attended? Is our Finance Minister disclosing all the facts?”

“Are we working with the federal government to smooth repayments over a number of years, or having it rescinded for Newfoundland and Labrador, as all other Atlantic provinces will receive equalization payments totaling approximately $3.8 billion in 2017. Maybe we can finally get the Liberal provincial government to ask the Liberal federal government about access to equalization. Why hasn’t the Minister fully disclosed the actual impact on the province’s bottom line, projections for the 2017 budget, and the options she is considering to deal with it?” asked Hutchings.

“The province’s portion of total HST revenue is estimated in advance based on economic indicators and reconciled later‎. If the estimate was too high, that’s a sign that our economy is performing worse than expected – something we predicted would happen after the Ball government crushed our economy with a raft of tax and fee hikes. Our province continues to be challenged from a budgetary perspective, partly because of the decline in commodities such as oil, and partly because the Ball Liberals have failed dismally in creating an environment for private sector investment while driving the economic and employment growth that they heralded from their ‘captains of industry.'”

Hutchings is calling on the Finance Minister to provide a full accounting of the overpayment by year, the repayment request, any efforts to have the repayment deferred, spread over a longer period of time or forgiven, and the impact on the province’s fiscal bottom line. “What will be the implications if the Ball government is not willing or able to get the repayment reduced? The Minister of Finance needs to be talking openly about this right now so we can all be part of the conversation, not leaving people in the dark.”

– 30 –

Media Contact:
Heather MacLean
Director of Operations and Communications
Office of the Official Opposition
(709) 729 6105
heathermaclean@gov.nl.ca