HALIFAX — Nova Scotia should introduce a carbon tax and broaden its harmonized sales tax to cover expenses including children's clothing, diapers and home energy costs, a review of the province's tax system says.
The report released Wednesday by former Ontario cabinet minister Laurel Broten also recommends a government spending freeze and lower income and corporate tax rates.
"The review confirms that the trajectory Nova Scotia is on is unsustainable," Broten said in a statement.
"Either Nova Scotians can decide to make changes to turn around or we will tumble, without sufficient revenue to pay for the public services we all want to support our quality of life."
In her report, Broten says Nova Scotia should follow the lead of British Columbia and bring in a carbon tax. Since B.C. implemented its carbon tax, she says it has reduced its corporate tax rates.
The HST, which stands at 15 per cent, should be expanded to replace the revenue that would be lost from lower income tax rates, she says.
Broten, who was appointed by the provincial government in February to lead the review, says her report is based on three "inescapable" facts: the province's population is aging, its economy is struggling and public services cost more than citizens can afford to pay.
Finance Minister Diana Whalen said she will review the 22 recommendations that Broten has on taxes, and another 20 she has made on regulations and fees.
The Progressive Conservatives urged the government to reject Broten's report, describing a carbon tax as a job killer.
"The carbon tax proposed by Mrs. Broten will jack up the cost of everything, including power rates," Opposition Leader Jamie Baillie said in a news release.
Broadening the HST would also hurt families, he argued.
"The premier should reject these recommendations and stop using studies and reports to delay meaningful tax relief for Nova Scotians," Baillie added.
