HST increase will hit Islanders with disabilities 'harder'

An impending one percentage point hike in the Harmonized Sales Tax, from 14 to 15 per cent, may not seem like a lot but advocates say it's a disproportionate burden for Islanders with disabilities.

The P.E.I. Council of People With Disabilities was against the introduction of the HST three years ago, and it is against the increase in the tax coming on Saturday.

"The HST tax is an unfair tax and it proportionally hits lower-income people harder," said Marcia Carroll, the council's executive director, noting many Islanders with disabilities have limited means and many are unemployed and collect social assistance.

'Where does the money come from?'

"The essentials that people have to buy are heavily taxed," she said, including clothing and electricity.

The province has brought in measures to cushion the increase for low-income Islanders, including a 10 per cent increase in the sales tax rebate, raising the personal income tax exemption and raising the low-income tax reduction.

However Carroll argues that the tax rebates do not adequately compensate those with low incomes.

"If you are receiving $120 a month for food, and $25 a month for clothing and that becomes taxed — where does the money come from? It comes from your food budget," Carroll said. Before the HST was introduced, clothing on P.E.I. was not subject to provincial sales tax.

People eat cheaper, highly-processed foods rather than fresh fruits and vegetables, become sick and the government ends up paying more for health care, Carroll said.

"If we could really get government officials to understand the determinants of health we might be able to come up with a fairer tax system," she said.

'Getting hit on all kinds of levels'

The council itself pays more for goods and services it consumes, too — putting an increased strain on the organization that's supposed to help others under increased strain.

Charities and non-profit organizations like the council do receive a 35 per cent rebate on the HST from the province but it's not enough, Carroll said, estimating the HST has meant a hit of $3,000 to $5,000 per year for the council. She also argued that businesses get a 100 per cent rebate on the HST.

"We're getting taxed more, the people that we represent who sometimes are our donors, their taxes are going up. So the first thing they stop doing is donating to charities. So we're getting hit on all kinds of levels," said Carroll.

The council has lobbied the government for an improved rebate to no avail, said Carroll.

"We were told that we're not living in the Garden of Eden, we're living in Prince Edward Island, and the rebate rate would stay the same," Carroll said.

Increase in revenue necessary, said government

P.E.I. Finance Minister Allen Roach announced the HST increase in April, during the annual budget speech. He said an increase in revenue was necessary to maintain core services, and that raising the HST was the best option.

He said government officials heard Islanders were concerned about cuts to services, and decided to move to increase revenues rather than reduce expenditures.

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