Small, but not in­signif­i­cant

The Compass - - EDITORIAL - An­drew Robin­son is The Compass’ edi­tor. He can be reached by email at edi­tor@cb­n­com­

Two is a very small num­ber. For chil­dren, it’s one of the first num­bers they’ll learn. Most peo­ple have two hands, two feet, two eyes, two par­ents — the list goes on. It’s re­lat­able and pretty easy to com­pre­hend.

But there’s noth­ing easy when it comes to the im­pact a two-per­cent­age-point HST in­crease will have on work­ing fam­i­lies and those living be­low the poverty line.

Spread­ing that per­cent­age in­crease over the var­i­ous ex­penses peo­ple deal with in or­der to live, fam­i­lies are go­ing to need to make some tough de­ci­sions about how to spend their money.

For fam­i­lies with an in­come be­low $30,000, the prov­ince hopes to re­duce the bur­den some­what by in­tro­duc­ing an en­hanced HST re­bate. The ar­gu­ment made last week is that re­bate will off­set any in­crease. How­ever, that might not be en­tirely ac­cu­rate.

As Dan Meades, pro­vin­cial co-or­di­na­tor of Tran­si­tion House As­so­ci­a­tion of New­found­land and Labrador, noted when speak­ing with The Tele­gram that those el­i­gi­ble for the re­bate will start pay two per cent more on ev­ery­thing start­ing next Jan­uary, but the re­bate won’t come un­til Oc­to­ber 2016.

How will fam­i­lies cope over those first nine months? They’ll likely rack up debt by us­ing credit cards, re­sult­ing in in­creased in­ter­est pay­ments. Chances are those living in poverty will still have a price to pay.

For mid­dle-in­come fam­i­lies, life will be­come a lit­tle bit harder too. They’ll be los­ing out on the axed en­ergy re­bate, so the cost of heat­ing the home will in­crease no­tice­ably next year. Much like the fis­cal sit­u­a­tion fac­ing the prov­ince’s cof­fers, bud­get­ing will be tight.

For busi­nesses, the prospect of watch­ing cus­tomers strive to tighten spend­ing and look for the cheap­est op­tions avail­able will not be ideal. Many con­sumers will fur­ther flock to ma­jor depart­ment stores or Costco for cheap goods, with small busi­nesses likely los­ing out.

For con­sumers look­ing to pur­chase big-ticket items like cars or homes, many will be in­clined to hold off — or make a mad dash to look af­ter that pur­chase be­fore the in­crease takes ef­fect next Jan­uary. Keep in mind too that the Lib­eral op­po­si­tion has al­ready stated it will re­verse the HST in­crease when it comes into power. If you’re a bet­ting per­son who thinks the Lib­er­als are des­tined to form the next gov­ern­ment this fall, you might also wait awhile.

There’s noth­ing easy about this de­ci­sion the gov­ern­ing Pro­gres­sive Con­ser­va­tives have made. With fur­ther deficits on the hori­zon, per­haps there was no other choice. But that doesn’t negate the fact it will be a hard pill to swallow for many. This new bud­get makes it plain that we are not living in pros­per­ous times.

The so-called promis­ing fu­ture feels like it’s a ways away.

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