Premier says 'surprise' federal tax holiday could cost province $62M

Premier Susan Holt says the federal tax holiday on some goodsannounced Thursday could cost New Brunswick $62 million in revenue.

"We're trying to figure out what this means," Holt said on Information Morning Fredericton on Friday.

She told reporters a tax agreement with Ottawa makes her optimistic the province will be compensated for the lost revenue.

The development came a week after New Brunswick released an update forecasting adeficit of $92.1 million for the 2024-25fiscal year.

Prime Minister Justin Trudeau announced a two-month tax holiday on a list of goods Thursday that would run from Dec. 14 to Feb. 15, 2025.

"That was a surprise," Holt said about the announcement made with about a day's notice.

WATCH | Premier 'really optimistic' Ottawa will cover lost tax revenue:

Premier hopes Ottawa will compensate N.B. for potential $62M tax loss

9 hours ago

Duration 0:55

New Brunswick could lose $62 million in tax revenue due to a two-month tax holiday on a list of goods announced by the federal government. The premier hopes Ottawa will cover that amount.

New Brunswick is one of five provinces witha harmonized sales tax, a combination of a federal and provincial taxon goods and services. The federal government collects the revenue and sends the provincial portion to the province.

On Thursday, a spokesperson for Finance Minister Chrystia Freeland said that if the tax-break plan goes ahead, the entire HST would be removed.

Holt said the lost tax revenue can't be made up through finding "efficiencies" in the budget.

She saidNew Brunswick will be talking to the federal government about how it will offset the cost.

"We can't take a $62-millionunexpected hit to our budget," Holt said. "So I'm optimistic that the federal government will help keep us whole."

Dominic LeBlanc, the federal intergovernmental affairsminister andBeausjour MP, told Radio-Canada'sLa matinaleradio program on Friday that he realizes it's complicated for provincial budgets.

LeBlanc said the federal government will work with provinces on the issue.

Butthe federal Finance Department did not answer a question Friday about whether it would compensate the province for the lost revenue, andthe prime minister didn't commit to compensationwhen asked about the issue on Friday.

The potential loss in tax revenue comes as a new government has pledged to implement several multimillion-dollarprograms.

Information Morning - Moncton21:45Premier Susan Holt takes your questions

The premier reflects on her first month in office and takes questions from New Brunswickers about their concerns.

Retention pay for nurses is expected to cost $74 million, some of which Holt has said was already budgeted. A planned 10 per cent rebate on power bills will cost another $90 million, she said.

The tax revenue loss, and the spending promises, were raised in the legislature Friday.

"So now we have a government that's said we're going to keep all of our commitments,and we're going to balance the books,"Opposition Leader Glen Savoiesaid. "So what is going to have to remove in order to live up to that commitment?"

He later asked if Holt wouldabandon thepromised power rebate.

"We made a commitment to New Brunswickers and they elected our team in record numbers," Holt said in response.