Okay. I'll skip to consumers' concerns.
For consumers, there is major concern that items like home heating fuel, electricity, and most clothing and footwear, which are currently exempt from the PST, would become taxable under the HST. The provincial treasurer recently indicated that he would not harmonize unless consumers were protected from tax increases on those items. The committee should consider options that would be used to alleviate the issue.
In terms of the impact on provincial revenue, in 1996 the Atlantic provinces were in the process of harmonizing their provincial sales taxes. The amount of compensation that was being offered to P.E.I. by the federal government was approximately $60 million. The concern at that time was that it was insufficient to offset the shortfall to be experienced over the long run by the province.
It's important to note that at that time, provincial revenue from the PST was approximately $130 million. By comparison, the provincial sales tax revenue was budgeted at just over $200 million for this year, a 54% increase.
We urge the committee to strongly recommend that the compensation offered to P.E.I. is commensurate to satisfy their revenue shortfall concerns and current tax exemption considerations.
Thank you.