Taxman

By Rob Patry

 

One thing we can all count on is death and taxes. It seems the former, albeit a bitter pill to swallow, is more readily accepted than the latter. Taxes in New Brunswick are now at 15% H.S.T. This harmonized sales tax provides the federal or national government 5% in taxes, and at the provincial level, 10%. In other words, the province is receiving the lion’s share of collected tax. Whenever Calais visitors cross the bridge into Canada, they may be saving money on the dollar, but ultimately are paying the same tax hit at the cash register that the rest of us have to put out.

This was the discussion held at the Garcelon Civic Center last week to iron out the possibility of removing the tax grab from Americans here to purchase product or services. The number of Canadians driving over any one of our three bridges to shop in the U.S. far exceeds the groups of Americans coming to our side, even with our Canadian dollar at an all time low. The question then begs to be asked, why? From my perspective, there are two viable answers. The selection does not equate to what can be purchased in Calais; and, the tax implications are too high. Let’s look at selection. We are not simply looking at goods purchased in St. Stephen, but more the services provided. Restaurants and the amenities at the Garcelon Civic Center must be taken into account when looking at the big picture. The new 5 Kings Brew Pub is drawing a lot of cross border interest as it gains a reputation as a higher end eating establishment. 

So would an incentive to drop the hefty tax such as a rebate program for cross border shoppers/visitors be of value?  On the surface it may appear so. However, from the two levels of government’s perspective, federally they don’t want to take a hit for a provincial issue. Provincially, the government doesn’t want to take a hit for what they see as a municipal issue. Lost taxes equate to lost revenue, and that can’t be made up. The double-edged sword is as business revenue increases, taxes increase, but if the tax base is rebated, down drops the gauntlet. And so it goes. The challenge for Calais and St. Stephen is of course the population base. Both sides have low numbers when it comes to count. Both sides are satellite towns to much larger urban centers. For all intents and purposes, we are an island divided by a border. Two communities reliant on each other, yet our hands are tied by outside bureaucracies who cannot begin to comprehend our plight. In an ideal world, our respective countries would appreciate our unique perspectives and grant us certain leeways because of it. Creating a tax free zone, a border where monetary restrictions could be lifted, and free trade was the norm would create much needed business on both sides, but is unlikely to happen any time soon. 

So we go back to the drawing board and try once again to get our neighbors to cross the great divide, and spend some much needed money, and vice versa.